Last week, Arbitrum distributed tokens with a tokenomics design that locked the team and VC allocations for a year. However, in their first governance proposal, they recently proposed to grant themselves another 750 million ARB tokens worth almost $1 billion from the DAO, to be allocated to an “Administrative Budget Wallet”.
The proposal looks suspiciously like a blatant cash grab. The team is basically trying to siphon funds from the DAO, under the guise of operational and administrative efficiency. We have seen countless examples of teams cashing out of treasury funds in the crypto space, but this is the first instance of a team creating a new channel of funding while their own allocation remains locked.
Many groups have already raised alarm over the proposal, with Blockworks Research even voting against it. The 750 million tokens were supposed to be part of the treasury, but now they are under the centralized control of three people.
Unfortunately, these kinds of shady activities make people like Gensler right – that much of the cryptocurrency industry is unregulated and filled with poor practices. This is why we need stronger regulations and stricter enforcement of existing rules in order to protect users and investors.