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- The corporation had begun selling ARB tokens for stablecoins.
- The 750 million tokens set aside would be used to pay for special grants.
There was significant fear, uncertainty, and doubt (FUD) spread over the weekend within the Arbitrum community. This occurred because Arbitrum holders suspected the Foundation had sold a large number of coins, significantly impacting the ARB’s value.
A representative with the Arbitrum Foundation revealed on Sunday that the corporation had begun selling ARB tokens for stablecoins before the governance community of token holders had “ratified” the over $1 billion budget for the organization in a blog post published early in the morning.
Ratification Rather Than Governance Proposal
The 750 million tokens set aside would be used to pay for special grants, repay relevant service providers, and cover continuing administrative and operational expenses of the foundation, as per the Arbitrum Improvement Proposal (AIP-1) on the Arbitrum DAO. More than eighty-three percent of those who had a say in the matter were opposed to the proposition.
Later, the Arbitrum Foundation addressed community concerns over the ARB token distribution, and its official statement said that users were asked to “ratify” the choices made by the Foundation before the DAO’s debut through the AIP-1. The Foundation said in a forum post that the AIP-1 wasn’t so much a governance proposal as it was a ratification.
Nevertheless, this action was widely panned and met with rejection among the Arbitrum community. The ARB token lost over 10% of its value over the weekend as a result of this revelation. There has been a reduction of 2.60% in the last hour with ARB prices trading at $1.18 as per CMC, compared to a loss of 1% over the previous week.
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