Arbitrum, which has recently come to the fore with the allegations that the altcoin project has sold its tokens, made a statement regarding the recent discussions surrounding the token allocation process.
Explanation on the token allocation process from Arbitrum
The Arbitrum Foundation, the body responsible for overseeing the decentralized governance system of the Arbitrum network, has issued a statement to clarify its position regarding the recent controversy surrounding the token allocation process, which triggered a 7% drop in the price of the ARB token. In this context, the altcoin team began its explanation as follows:
There is a very lively discussion of AIP-1 on the Arbitrum governance forums. Decentralized governance works as intended. We are all one community, and violent public discourse will yield the best results. There have been several requests for clarity from the Arbitration Foundation regarding the approval process, and here is a long-form response from the Foundation that adds additional context.
The Arbitrum team noted in their series of tweets that when the DAO was launched, there was a chicken-and-egg issue, some decisions needed to be made before and in connection with a wider launch. “The goals of AIP-1 were to engage the community about initial decisions and ultimately enable token holders to show their support by approving initial decisions and framework through DAO voting, and we are grateful for community feedback,” the team explained.
Meanwhile, in the midst of these discussions, altcoin price broke south and took a bottom dive. At press time, the ARB was trading at $1.19, losing over 7% on a daily basis.
The Altcoin team clarified the token sale allegations!
cryptocoin.com As we reported, the Arbitrum Foundation was criticized by community members who felt that their concerns and input regarding the proposed allocation of 750 million ARB tokens had been overlooked, as detailed in Arbitration Improvement Proposal 1 (AIP-1).
In the team’s statement, the Arbitrum Foundation acknowledged the ‘live discussions’ taking place in the governance forums and argued that decentralized governance is working as intended. The organization argued that some decisions should be made before and in connection with a wider launch, and that the goals of AIP-1 are to engage the community and get token holders to express their support through DAO voting.
The foundation also clarified the recent discussions regarding the allocation of 50 million ARB tokens. In this context, he announced that 40 million was allocated as a loan to a sophisticated actor in the financial markets. He noted that the remaining 10 million tokens were converted into fiat money for operating costs. The Altcoin team used the following statements in its statement on this subject:
To address two important questions asked: 1) The Foundation did not sell 50M ARB tokens, and 2) The rationale behind the initial allocation of 750M ARBs was covered in significant detail in the forum post above. Regarding on-chain transfers of 50M ARB tokens, 40M ARB tokens were allocated as a loan to a sophisticated actor in the financial markets space. The remaining 10 million were converted into fiat and set aside for operating costs.
After these statements, some members of the community remain suspicious. One of them, Eden Au, expressed concern in his criticism, noting that the foundation had already spent 6.7% of the proposed 750 million ARB tokens despite the community voting against the proposal.
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