Arbitrum DAO Locks $770 Million In ARB Tokens Into Vesting Contract: Implications For ARB

Samuel Edyme

1 year ago

3 mins read

Arbitrum DAO Locks ARB Tokens Into Vesting Contract

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Arbitrum DAO recently took a step toward addressing an obstacle. The DAO has committed to locking 700 million ARB tokens, valued at an estimated $770 million, into a vesting contract to foster transparent governance and accountability, per a community proposal.

The approval for this commitment came from an improvement proposal introduced during a contentious period within the Arbitrum ecosystem. The specifics of this commitment involve gradually releasing these funds to the Arbitrum Foundation over four years.

Details Of The Vesting Contract

The new initiative, aptly termed AIP 1.1, solves recent disagreements concerning Arbitrum’s internal governance. Earlier this year, the project was embroiled in controversy due to a proposal for a ‘special grants’ program.

This controversial program was originally designed to assign more than 700 million ARB tokens directly to the Arbitrum Foundation. These funds, representing $1 billion at the time, were proposed to be directed toward backing projects utilizing Arbitrum’s advanced technology.

The sheer magnitude of the allocation sparked concerns about the transparency of a project whose ethos is grounded in collective decision-making. This resulted in an alternate proposal to redirect the funds from the Foundation back to the DAO, which was subsequently rejected.

To satisfy the concerns of the community, the proposal AIP-1.1 was introduced. This strategic proposal aimed to impose stricter controls on the allocation of the DAO’s treasury. This plan empowers the DAO with the authority to modify the vesting period, allowing them to lengthen, shorten, or even halt the vesting process entirely.

This move towards financial transparency marks a milestone for Arbitrum’s DAO, reinforcing its commitment to its decentralized and democratic ethos. It not only provides a check on the arbitrary allocation of funds but also ensures that decisions align with the interests of the Arbitrum community.

Implications for Arbitrum

Securing $770 million in ARB tokens through a vesting contract is a significant event for Arbitrum’s DAO. By taking this action, the Arbitrum Foundation can establish a consistent source of funding and demonstrate to the community at large their dedication to transparency and accountability.

The measure could also impact the market dynamics for the ARB token. With a significant amount of the tokens locked up, the reduced supply could potentially influence its price.

This further underscores the importance of this step by the Arbitrum DAO, as its ramifications extend beyond governance to directly influencing the ecosystem’s dynamics.

Furthermore, this development within the Arbitrum ecosystem signifies the project’s maturity and commitment to its democratic ideals. It exemplifies how DAOs can effectively manage significant resources while maintaining transparency and accountability, setting a precedent for other similar organizations in the crypto ecosystem.

Arbitrum (ARB) price chart on TradingView — Arbitrum (ARB) price is moving sideways on the 4-hour chart. Source: ARB/USDT on TradingView.com

Meanwhile, over the past 24 hours, Arbitrum’s native token ARB has witnessed an upward trend of 2.3%. This bullish trend comes after the asset has seen slight retracement in the past week, dropping by nearly 2%. ARB currently has a market price of $1.12 at the time of writing.

Featured image from iStock, Chart from TradingView

Samuel Edyme

Meet Samuel Edyme, Nickname - HIM-buktu. A web3 content writer, journalist, and aspiring trader, Edyme is as versatile as they come. With a knack for words and a nose for trends, he has penned pieces for numerous industry player, including AMBCrypto, Blockchain.News, and Blockchain Reporter, among others.

Edyme’s foray into the crypto universe is nothing short of cinematic. His journey began not with a triumphant investment, but with a scam. Yes, a Ponzi scheme that used crypto as payment roped him in. Rather than retreating, he emerged wiser and more determined, channeling his experience into over three years of insightful market analysis.

Before becoming the voice of reason in the crypto space, Edyme was the quintessential crypto degen. He aped into anything that promised a quick buck, anything ape-able, learning the ropes the hard way. These hands-on experience through major market events—like the Terra Luna crash, the wave of bankruptcies in crypto firms, the notorious FTX collapse, and even CZ’s arrest—has honed his keen sense of market dynamics.

When he isn’t crafting engaging crypto content, you’ll find Edyme backtesting charts, studying both forex and synthetic indices. His dedication to mastering the art of trading is as relentless as his pursuit of the next big story. Away from his screens, he can be found in the gym, airpods in, working out and listening to his favorite artist, NF. Or maybe he’s catching some Z’s or scrolling through Elon Musk’s very own X platform—(oops, another screen activity, my bad…)

Well, being an introvert, Edyme thrives in the digital realm, preferring online interaction over offline encounters—(don’t judge, that’s just how he is built). His determination is quite unwavering to be honest, and he embodies the philosophy of continuous improvement, or “kaizen,” striving to be 1% better every day. His mantras, “God knows best” and “Everything is still on track,” reflect his resilient outlook and how he lives his life.

In a nutshell, Samuel Edyme was born efficient, driven by ambition, and perhaps a touch fierce. He’s neither artistic nor unrealistic, and certainly not chauvinistic. Think of him as Bruce Willis in a train wreck—unflappable. Edyme is like trading in your car for a jet—bold. He’s the guy who’d ask his boss for a pay cut just to prove a point—(uhhh…). He is like watching your kid take his first steps. Imagine Bill Gates struggling with rent—okay, maybe that’s a stretch, but you get the idea, yeah. Unbelievable? Yes. Inconceivable? Perhaps.

Edyme sees himself as a fairly reasonable guy, albeit a bit stubborn. Normal to you is not to him. He is not the one to take the easy road, and why would he? That’s just not the way he roll. He has these favorite lyrics from NF’s “Clouds” that resonate deeply with him: “What you think's probably unfeasible, I've done already a hundredfold.”

PS—Edyme is HIM. HIM-buktu. Him-mulation. Him-Kardashian. Himon and Pumba. He even had his DNA tested, and guess what? He’s 100% Him-alayan. Screw it, he ate the opp.

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