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- The majority of the Arbitrum
community did not accept AIP 1.05.
- The ARB coin price dropped by 2% today but continues to trade above $1.66.
As the Arbitrum (ARB) token continues to rise, why did the Arbitrum community reject another proposal, AIP 1.05?
The Arbitrum Community Did Not Accept AIP 1.05
AIP 1.05, a controversial Arbitrum Improvement Proposal that aimed to return 700 million ARB governance tokens, was overwhelmingly rejected.
118 million ARB, which accounted for 84.01% of the total votes, voted against the proposal. In contrast, 21 million ARB, which accounted for 14.57% of the total votes, supported the proposal. 2 million ARB abstained. The failure of AIP 1.05 was already expected. Yesterday, 83% of the total votes had voted against the proposal passing.
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ARB/USDT 2 Hour Price Chart
Arbitrum (ARB) price rose by more than 24% yesterday and is trading at $1.66 today with a 2% drop. The market value of ARB token has increased by more than 6% and exceeded $2.12 billion.
What is ‘Arbitrum Improvement Proposal 1.05’?
The Arbitrum Improvement Proposal 1.05 is titled “AIP 1.05: 700 Million ARB Returning to DAO Treasury [REAL]”. This Arbitrum governance proposal claims that the unauthorized and premature transfer of 700 million ARB tokens, valued at over $1 billion, to investment projects claiming to finance using Arbitrum’s technology is truly decentralized and beyond authority.
The incident began in early April when the Arbitrum Foundation withdrew a controversial governance proposal, AIP-1. This proposal aimed to transfer 750 million ARB tokens to the Foundation for investment projects claiming to finance using Arbitrum’s technology.
However, this transaction had already been made without the approval of token holders, and token holders voted against this proposal. AIP 1.05 states that this action is a symbolic step showing that DAO has real authority.
Why Did AIP 1.05 Fail?
Notable token holders who voted against AIP-1.05 include those who voted with millions of ARB tokens, such as “0x0eB5”, olimpio.eth, 0xBbE9, galxe.arb, chainlinkgod.eth, and blockworksres.eth.
The reasons for voting against the proposal may be that smaller votes are focused on increasing the value of Arbitrum’s governance token, while larger holders (usually delegates) prioritize the platform’s long-term sustainability and the Foundation’s capacity to distribute tokens.
In addition, some people may have seen the proposed forced buyback as a radical measure designed more as a publicity stunt than a practical solution.
Furthermore, some parties claim that AIP-1.1 already addresses the contentious funds issue because the Arbitrum Foundation plans to transfer the tokens to a smart contract that DAO can set the vesting feature for. As a result, AIP-1.05 may have potentially complicated the issue.