• The AIP-1.05 proposal, which seeks to return 700 million ARB tokens to the DAO Treasury, has been met with overwhelming opposition.
• The origin of the AIP-1.05 proposal can be traced back to the first weekend of April when Arbitrum Foundation backtracked on a critical proposal – AIP-1.
• Despite its stated purpose, the AIP-1.05 proposal was not favored by an overwhelming majority of ARB voters and only received 14.57% support.


A controversial Arbitrum Improvement Proposal (AIP-1.05) that sought to return 700 million ARB tokens to the DAO Treasury was met with overwhelming opposition on April 15th, 2021. This proposal looked to overturn a previous decision made by the Arbitrum Foundation that would have transferred $1 billion worth of governance tokens to itself without receiving approval from the DAO’s governing body.

Origin Of The AIP-1.05 Proposal

The origin of this proposal can be traced back to early April when the Arbitrum Foundation proposed (AIP-1) a plan that would have transferred 750 million ARB tokens into its own possession for investment in initiatives built using its technology. Despite strong opposition from token holders, it seemed likely that it would pass without their approval – until questions arose over whether or not decentralization had been achieved within Arbitrum’s governance structure. In response, a new set of proposals were created including AIP-1.05 which aimed at preventing such an event from happening again and restoring control over treasury resources back into the hands of token holders rather than service providers or Foundations associated with them..

Reasons Behind The Failure Of AIP-105

Despite its stated purpose, AIP-105 failed to receive enough support from token holders, with 84% voting against it and only 14% in favor; 118 million ARB tokens voted against while 20 million voted in favor of it . According to reports someARBs saw this as too unrealistic and ‘myopic’ given how much power they were looking for over treasury resources that did not rightfully belong to them and could not be easily returned in mass quantities due to legal constraints on certain organizations involved in holding these funds..

Impact On Decentralization

The failure of this proposal has raised some concerns about decentralization within layer 2 networks like Arbitrum which are now governed by decentralized autonomous organizations (DAOs). Questions remain as whether or not these organizations can effectively operate without becoming overly centralized or heavily reliant on service providers who may have their own agendas separate from those provided by token holders and other stakeholders..

Overall, although there is still much work left for Layer 2 networks like Arbitrum before they become truly decentralized entities governed entirely by users instead of third parties ,the rejection of this proposal serves as a reminder that token holders must stay vigilant when it comes protecting their rights and assets within any given network .

By admin