Shocking Claims for Arbitrum, Turks’ Favorite Altcoin: Are Terra, FTX, Related to Wintermute?

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Popular DeFi scaling project of the last period Arbitrum The allegations about his team gathered a great reaction. These reactions were primarily related to the foundation selling ARB tokens without any permission. The foundation sold 2.7 billion ARB tokens worth $3.2 billion to sell 700 million to cover operating expenses and provide special subsidies. With LinkedIn company information correct, the $840 million revenue from this sale translates to $65 million per team member.

The Arbitrum ecosystem attracts attention as a DeFi scaling solution for Ethereum, but it is also the focus of criticism for administrators to sell such a large amount of tokens without any permission. One competitor, Optimism, has only 315 million OP tokens in circulation, a ninth of Arbitrum’s.

community, foundation ARB tokenThe problem deepened when he realized that he was selling his . The foundation had pledged to move to a decentralized autonomous organization (DAO) to give ARB token holders a say in the management of Arbitrum. However, when the foundation offered to allocate $1 billion worth of ARB tokens to it on behalf of administrative costs and special grants, ARB holders rejected the offer.

The foundation then continued to sell some of the ARB tokens before the proposal was put to a vote. When challenged by the community, the foundation made things even more tense by claiming that the initial proposal was only to approve a decision the foundation had already taken. This incident exposed the governance issues in the Arbitrum ecosystem and raised questions about the impact of the community on the network.

COINGEEK author and a graduate of the University of Auckland Law School Jordan AtkinsHe commented that “Arbitrum’s promise of decentralization is just an ‘advertisement’”. He stated that the foundation will not authorize token holders to make any decisions unless they agree, indicating that it is not a decentralized autonomous entity.

Atkins also shared his concerns about Arbitrum’s relationship with market maker Wintermute. wintermutereceived 40 million ARB tokens as part of a $1 billion dividend deal. The London-based digital asset hedge fund came to the fore with its rapid rise in profits in 2021, increasing its profits from around $23 million at the end of 2020 to over $500 million by December 2021. Interestingly enough, the company made even more profits during the Terra crisis last year. did.

Wintermute traded $250 million in UST-LUNA arbitrage during Terra’s collapse in May and made huge profits. Forbes reports that Wintermute bought UST at the price of $0.80 and traded it for $1 worth of LUNA, then sold the LUNA again to make a profit. This process continued until the UST dropped to $0.10.

Koinfinans.com As we have reported, these transactions certainly attracted attention in those days when the industry faced major problems. As a matter of fact, many names stated that CEO Evgeny Gaevoy was behind these successful transactions. Forbes took a different approach, comparing Gaevoy to Sam Bankman-Fried. According to Gaevoy, Wintermute had $400 million in equity and $720 million in assets as of December last year.

Allegedly, Wintermute wants to fill the stock market gap left by FTX. As a matter of fact, the company does not currently own any stock market. However, experts are already starting to question the relationship between Wintermute and Arbitrum and debate the reliability of the network.

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