Arbitrum DAO Faces Criticism Over Gaming Program Transparency
Arbitrum DAO– Members of Arbitrum’s decentralized autonomous organization (DAO) are actively discussing a potential clawback of funds allocated to the Arbitrum Gaming Catalyst Program (GCP). The discussions have emerged due to concerns regarding the program’s lack of progress and transparency.
On March 24, DAO member Nathan van der Heyden submitted a proposal urging the recovery of unused funds allocated to the gaming initiative. The GCP was launched in 2024 to establish Arbitrum as a leading platform for on-chain gaming development. However, van der Heyden expressed concerns over the unsustainable projections made at the program’s inception, noting that it failed to deliver on its promises.
Van der Heyden stated, “We must wind down GCP activities and secure all possible funds in order to safeguard the DAO’s funds and restore investor confidence.” Additionally, he emphasized the need for better transparency in the program’s operations, pointing out that GCP was reluctant to document its progress.
Phased Clawback Proposal
While van der Heyden called for the recovery of unused funds, he suggested that the clawback process be done in phases rather than an immediate take-back of all allocated funds. The goal, according to van der Heyden, is to ensure a more sustainable and transparent approach, ensuring the DAO’s funds are protected while fostering investor trust.
The GCP program initially allocated about 225 million ARB tokens, valued at roughly $468 million, for investment in promising gaming studios. However, the program’s timing coincided with a significant token unlock event, which led to a drop in the ARB token’s price. By June 2024, the value of the tokens allocated to the program had fallen to about $215 million, a decline of more than 50%.
Currently, ARB tokens are trading at approximately $0.38, reflecting an 81% decrease from their value when the GCP launched.
Web3 Gaming Funding Struggles
The proposal to clawback funds also comes amid a broader decline in Web3 gaming investments. Toshiyuki Otsuka, founder of GameFi platform Snpit, commented on the situation, stating that market volatility and the oversaturation of low-quality projects have slowed investment in Web3 gaming. He explained, “Many investors are taking a more cautious approach, waiting to see which projects can demonstrate long-term viability before committing capital.”
Otsuka further added that the speculative rush of previous years has given way to a more sustainable investment landscape, where only the most promising projects are securing funding.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.
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