A vesting contract has secured 700 million ARB tokens, valued at $770 million, for the decentralized autonomous organization of Arbitrum. The DAO will gradually receive the funds from the contract over four years, demonstrating its commitment to accountability and transparent governance.
The AIP 1.1 proposal, which was approved after a contentious governance process in the Arbitrum community, led to the decision. The plan had a “special grants” program that proposed to give more than 700 million ARB tokens to the Arbitrum Foundation, which sparked a lot of criticism earlier this year. The Foundation claimed that the tokens would be used to fund projects that use Arbitrum’s technology.
Some people were concerned about the lack of clarity on how the funds were distributed since the project aims to involve everyone in the decision-making process. The Foundation received more than $1 billion worth of tokens at that time, which was a huge amount of money. A proposal was made to send the tokens back from the Foundation to the DAO, but it did not pass.
Arbitrum is a technology that enhances the performance and affordability of smart contracts on Ethereum, created by Offchain Labs. It is a Layer 2 solution, which means it operates on top of the Ethereum network and inherits its security and decentralization.
Arbitrum’s DAO is responsible for managing the development and governance of the technology, through a process of submitting and voting on Arbitrum Improvement Proposals.
Arbitrum DAO’s Role in Shaping the Network
The Arbitrum team proposed AIP-1.1, a plan to address the community’s worries about the DAO’s treasury distribution. The plan gives the DAO the ability to change the vesting period, which means it can adjust, pause, or stop the vesting process as needed.
The vesting contract is seen as a major step for the Arbitrum DAO toward establishing trust and legitimacy in its governance process. Arbitrum is one of the leading Layer 2 solutions for Ethereum, offering scalable and low-cost smart contract capabilities.
By locking up a significant portion of its native token into a vesting contract, the DAO demonstrates its commitment to long-term vision and alignment with the community’s interests.
