The Chaotic First Governance Proposal of Arbitrum
According to reports, Arbitrum\’s first governance proposal became chaotic, with $1 billion worth of ARB tokens at risk. The first attempt to govern the Arbitrum blockchain began on
According to reports, Arbitrum’s first governance proposal became chaotic, with $1 billion worth of ARB tokens at risk. The first attempt to govern the Arbitrum blockchain began on Saturday due to a proposal to let the Arbitrum Foundation control 750 million ARB tokens, valued at nearly $1 billion. These tokens will fund a “special grant” program aimed at promoting the growth of Arbitrum. However, according to the AIP-1 proposal, ARB holders cannot decide to whom or how to allocate nearly $1 billion of the Arbitrum Foundation’s funds. This is because the centralized Arbitrum Foundation does not need to place its grant allocation under “full chain governance.”. (CoinDesk)
Arbitrum community allocates 750 million ARB governance proposals to avoid community governance
Arbitrum is a blockchain platform that offers smart contracts and decentralized applications. It aims to solve the problems of scalability and high transaction costs that exist on other blockchain platforms. However, it recently faced a setback when its first governance proposal became chaotic, putting $1 billion worth of ARB tokens at risk. In this article, we will explore what happened.
What Happened?
On Saturday, a proposal was made to let the Arbitrum Foundation control 750 million ARB tokens, valued at nearly $1 billion. These tokens were supposed to fund a “special grant” program aimed at promoting the growth of Arbitrum. However, according to the AIP-1 proposal, ARB holders could not decide to whom or how to allocate nearly $1 billion of the Arbitrum Foundation’s funds. This is because the centralized Arbitrum Foundation does not need to place its grant allocation under “full chain governance.”
The Chaos Ensued
The proposal met with resistance from the community, as it raised concerns over centralization and lack of transparency. Moreover, the fact that the proposal was put forward by the Arbitrum Foundation itself, which is a centralized entity, further compounded the problem.
The community started voicing its dissent and demanded more clarity and transparency. The proposal was put to a vote, but the voting process was problematic. Some voters experienced delays, while others found that their votes were not counted. As a result, the outcome of the vote became unclear.
Furthermore, a bug was discovered in the voting contract, which enabled an attacker to drain the funds from the contract. This raised questions about the security of the platform and the competence of its developers.
Lessons Learned
This incident highlights the importance of decentralization and transparency in blockchain governance. The fact that the proposal was put forward by a centralized entity and that the voting process was problematic shows that there is a need for more decentralized and transparent governance mechanisms.
Additionally, the incident underscores the need for better testing and auditing of smart contracts. The discovery of the bug in the voting contract shows that there are still vulnerabilities in smart contracts that need to be addressed.
Conclusion
The first governance proposal of Arbitrum was a chaotic affair that put $1 billion worth of ARB tokens at risk. The incident highlights the importance of decentralization, transparency, and proper testing and auditing of smart contracts in blockchain governance. It remains to be seen how the community and the Arbitrum Foundation will respond to this incident and whether they will learn from it.
FAQs
1. What is Arbitrum?
Arbitrum is a blockchain platform that offers smart contracts and decentralized applications.
2. What was the first governance proposal of Arbitrum?
The first governance proposal of Arbitrum was a proposal to let the Arbitrum Foundation control 750 million ARB tokens, valued at nearly $1 billion.
3. What lessons can be learned from the incident?
The incident underscores the need for more decentralized and transparent governance mechanisms, as well as proper testing and auditing of smart contracts.
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