Arbitrum has been closely watched since its release as one of the most successful and talked-about tokens between Q4 2022 and Q1 2023.
Arbitrum is an Ethereum layer2 scaling solution that supports smart contracts without the limitations of scalability and privacy. Developers can create smart contracts using code that specifies the behaviour of a virtual machine, improving scalability and privacy.
Despite Arbitrum’s success, its community reacted negatively when the Arbitrum DAO opposed the transfer of funds to the Arbitrum Foundation. Speaking about the situation at Consensus 2023, Steven Goldfeder, the cofounder of Arbitrum and CEO of Offchain Labs, stated that Offchain Labs, the creator of the Arbitrum project is completely different from the newly formed DAO and Foundation that manages all affairs related to Arbitrum.
He added that part of the roadmap of Arbitrum was to make it fully decentralized which is what is happening already as the DAO, made up of ARB token holders, controls Arbitrum.
$1 billion transfer saga
As earlier said, the DAO community came under fire when $1 billion worth of ARB tokens were transferred to the Arbitrum Foundation before a unified decision was made about the transfer. The CEO of Offchain Labs told Consensus that the incident was caused by faulty communication in the community.
However, he acknowledged that he does not have complete information about what the Foundation planned to do or did with the transferred funds, as he is simply another ARB holder in the community. “I can’t speak to what the Foundation did.”
Steven expressed his satisfaction with how Arbitrum is developing into one of the most decentralized projects in Web3. “The community seems happy and I also think, you know, transparency and accountability is a great thing.” he noted that there’s “a massive community with many different interests and companies and protocols and projects that care deeply about this.”
Offchain Labs employees hold ARB with a clause
When asked about the influence of Offchain Labs on Arbitrum, Steven said that while the project is no longer controlled by Offchain Labs, employees of the Labs were given ARB tokens as part of the roadmap of Arbitrum. The employees got 44% of the tokens while the other 56% is being controlled by the DAO.
The Offchain Labs leader revealed to the audience that the 44% token that was given to insiders were done so with a clause – “four-year transfer restrictions with nothing unlocking before one year.” In addition, he said that the employees cannot vote using their tokens as they are only allowed to delegate their voting rights to other community members.