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During the course of the weekend, members of the Arbitrum crypto community were subjected to panic calls and widespread FUD about the recently launched ARB token. This came about as holders of Arbitrum speculated that the Arbitrum Foundation had sold a significant amount of the coins, thereby affecting the ARB’s price to a major extent.
Arbitrum Team Dumped Tokens?
According to a blog post published early on Sunday morning by an official of the Arbitrum Foundation, the company started selling ARB tokens for stablecoins even before the governance community of token holders had “ratified” the almost one billion dollar budget for the organization.
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In accordance with the Arbitrum Improvement Proposal (AIP-1) on Arbitrum’s DAO, the 750 million tokens kept aside would be used to pay for special grants, reimburse appropriate service providers, and cover ongoing administrative and operational expenditures of the foundation. The majority of the stakeholders, almost 83% of them, voted against the proposal.
Arbitrum Responds With Ratification
The Arbitrum Foundation later addressed the concerns raised by the community surrounding the distribution of ARB tokens and according to its official announcement, the AIP-1 requested that users “ratify” the decisions that the Foundation had taken before the launch of the DAO. In a forum post, the foundation clarified that the AIP-1 was more of a ratification than a governance proposal.
Additionally, the foundation did acknowledge the issue and was quoted as saying:
One of the mistakes in the drafting of AIP-1 was a failure to note at the outset that this proposal was intended to act as a ratification of the initial setup of both the Arbitrum DAO.
This move, however, was negatively accepted by the Arbitrum community and fell victim to large-scale criticism. In wake of this news, the ARB token suffered, with its price dropping by almost 10% over the weekend. As things stand, the price of ARB is currently exchanging hands at $1.17 which represents a decline of 0.80% in the past one hour as opposed to a decrease of 1% recorded over the past week.
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