governance

Arbitrum poses new governance proposals after community furor

The Arbitrum Foundation has made a couple of new governance proposals following the fracas that occurred over its first attempt.

The Arbitrum Foundation has released a raft of new improvement proposals following the fracas that ensued after its first failed attempt at governance.

On April 5, Ethereum layer-2 solutions provider Arbitrum posted new Arbitrum Improvement Proposals (AIPs) for the governance of the network.

The new proposals include AIP-1.1, which covers a smart contract lockup schedule, spending, budget and transparency. The other, AIP-1.2, tackles amendments to current founding documents and lowers the proposal threshold from 5 million Arbitrum (ARB) tokens to 1 million ARB “to make governance more accessible.”

In an April 5 tweet, it confirmed the Arbitrum DAO came to a consensus against its first proposal, AIP-1.

On April 2, the Arbitrum Foundation stated AIP-1 “likely will not pass” due to community backlash. Tokenholders objected to the proposal, arguing that it encompassed too many topics, and decried granting around $1 billion worth of ARB tokens to the foundation.

The foundation then backtracked, stating in an April 5 tweet that it would not take control of the tokens:

“The Foundation will not move any of the remaining 700M tokens in the Administrative Budget Wallet until an acceptable budget and smart contract lockup schedule have been approved by the DAO.”

The foundation also issued a transparency report that “describes actions taken to get the DAO up and running.”

“We have heard the feedback,” it stated, before adding that it has “worked diligently to address it and make sure the Foundation can represent, and serve the DAO’s best interests with their support.”

The two new AIPs were posted on the Arbitrum community forum and will be available for feedback for at least 72 hours before a planned week-long snapshot vote.

Related: Arbitrum to break up governance votes after community backlash

ARB prices have dropped 4% over the past 24 hours, falling to $1.22. The layer-2 token was dumped heavily following its airdrop on March 23 and is down 86% from its peak price of over $8.50 on that day.

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Arbitrum to break up governance votes after community backlash

The Arbitrum Foundation has backtracked on a controversial proposal and ratification vote that gave it control of a huge chunk of tokens.

Ethereum layer 2 solutions provider Arbitrum has backtracked on its governance voting system following community backlash from token holders.

On April 2, the Arbitrum Foundation tweeted that its first governance proposal, AIP-1, “likely will not pass” and added its “committed to addressing the feedback received from the community.”

The move will break up the debatable governance package into smaller segments. The team noted:

“AIP-1 is too large and covers too many topics. We will follow the DAO’s advice and split the AIP into parts. This will allow the community to discuss and vote on the different subsections.”

The U-turn follows a weekend of community backlash over the foundation’s “ratification” vote for decisions it had already undertaken. The proposal would have given the foundation, a centralized company, control over 750 million Arbitrum (ARB) tokens worth around $1 billion.

Critics, such as decentralized finance and decentralization advocate Chris Blec, argued the proposal was “decentralization theatre.”

The foundation stated that the 750 million tokens received would be voted on in its own AIP. “We’re working on options to add more accountability,” it stated, adding, “for example, a vesting period of 4 years. Furthermore, tokens held by the Foundation cannot be used to vote.”

There will also be a budgeting proposal, in which the foundation will propose transparency reports “to make the community aware of how the funds are spent over time.”

The Special Grants program is vague and lacks DAO involvement, the foundation stated. It will be renamed “Ecosystem Development Fund” with context provided on how the funds will be used to benefit the Arbitrum ecosystem.

Related: Arbitrum’s first governance proposal sparks controversy with $1B at stake

The new Arbitrum Improvement Proposals will be issued “early this week,” the foundation concluded.

ARB token prices took a massive hit over the weekend, slumping 18% from an April 1 high of $1.40 to a low of $1.15 in the April 3 morning Asian trading session, according to CoinGecko.

ARB has seen an 86% price decline since its airdrop on March 23.

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Uniswap Foundation proposal gets mixed reaction over $74M price tag

The largest DEX in the world could be supported by a new $74 million foundation if a new proposal from two community members passes a vote later this month.

The Uniswap Labs community has already begun mulling over a new proposal that would form a Uniswap Foundation based in the United States, but first, it’s going to cost $74 million.

The proposal has garnered mixed feedback from the community so far, with many praising the foundation’s plans to support and expand the Uniswap ecosystem, while others have balked at its hefty price tag.

The Friday proposal was put forth by Uniswap Labs’ former chief of staff, Devin Walsh, and Uniswap grant program lead, Kenneth Ng, noting the foundation’s main aim is to “support the Protocol’s decentralized growth, reinvigorate governance, and serve as a Protocol advocate,” according to Walsh.

If it passes a vote, the Uniswap Foundation (UF) would be incorporated in Delaware and headed by Walsh as executive director, while Ng will become head of operations. 

To make her vision a reality, Walsh has asked for $74 million in Uniswap (UNI) over three years, $60 million of which would be used for its own Uniswap Grant Program (UGP), while another $14 million will be used as “operating budget” to build out a team of 12.

Uniswap is the world’s largest decentralized exchange (DEX) by trading volume. Uniswap v3, the third version of the DEX, has done $793.8 billion in volume over the past 24 hours, putting it on par with centralized exchanges (CEXs) Huobi Global and KuCoin, according to CoinGecko.

Uniswap founder Hayden Adams proclaimed in a Thursday tweet that he was “Sooo excited about this proposal.” Adams seemed confident that the proposal would pass when he added, “After this passes, the Foundation will be yet another team working towards a future where the Protocol does not just survive — it thrives!”

Although the proposal has so far enjoyed a fair amount of support from Adams and others in the Uniswap community, it has run into a significant cohort of detractors who say the price is far too high.

Partner at Cinneamhain Ventures Adam Cochran shared his approval for the goals of the UF, but added in a Thursday tweet that the $60 million for the UGP “is misguided at this phase.”

Cochran pointed out that the $7 million in grants that the current UGP has already issued have been spent on “underwhelming” issues. He concluded that while there have been several worthwhile ventures the UGP has invested in, “I don’t think the current performance merits ‘Give us $60M + $14M to run it for 3 years.’”

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Co-creator of decentralized game Dark Forest Scott Sunarto also felt that the UF’s goals were in line with the protocol’s potential for growth, but that there was too much “fluff” in the proposal. He suggested the UF concentrate efforts on “protocol growth and R&D.”

The proposal will be put to a final vote on the Snapshot governance voting platform on Aug. 8 if the current ongoing straw poll passes.

UNI is up 1.4% over the past 24 hours, trading at $9.04, according to CoinGecko.

Polkadot’s founder announces steps toward full decentralization with new governance model

Gavin Wood said that he seeks to transform the Polkadot blockchain into a full technocracy.

Live from Polkadot Decoded in Buenos Aires on Wednesday, Polkadot (DOT) and Kusama founder Gavin Wood announced that the blockchain’s governance model would undergo a new transformation. Dubbed Gov2, anyone would be able to start a referendum at any time for as many times as they wish in the new setup, similar to initiating new transactions on the blockchain.

Thereafter, pending referenda need 50% of the vote from stakeholders within 28 days’ time for approval or face rejection by default. Participants can also intervene and launch timely cancellation proposals, which require similar voting procedures, in the event that technical glitches are discovered within the referenda, themselves. Passive voters, t can specify a different delegate for every class of referendum in the system in a process known as multirole delegation.

Wood said there will be a new body, dubbed the Polkadot Fellowship, composed of technical experts who have the power to shorten referenda voting times in the event of time-sensitive matters. Overall, several tenets would remain invariant from the previous governance model. First, 50% of the total stake in the system will be allowed to command the system’s future. Greater weight will also be given to those willing to lock their tokens in the system for a longer durationin a process known as conviction voting. Finally, a committee will also remain to oversee the blockchain’s technocratic developments.

As told by Gavin, the changes will reflect the flaws of centralization and one referendum at a time voting system present in Polkadot’s original governance model. Gov2 is set to launch on Kusama imminently, following afinal professional audit of its code. Once tested on Kusama, a proposal will be made to bridge it to Polkadot.