Arbitrum DAO Rejects Proposal: ETH Allocation Dispute Heats Up

Arbitrum DAO Members Disagree on Future of ETH Holdings: Who Will Win?

Arbitrum DAO Rejects Proposal – Arbitrum‘s plan to reinvest a portion of its Ethereum (ETH) holdings into yield-bearing opportunities has hit a roadblock, as some delegates of its decentralized autonomous organization (DAO) oppose the recommendation made by the three-member Growth Management Committee (GMC). The GMC proposed allocating 7,500 ETH from Arbitrum’s treasury to three decentralized finance (DeFi) protocols. However, none of these protocols are Arbitrum-native.

The proposed plan includes investing 5,000 ETH in Lido, a liquid staking protocol, in exchange for 5,000 wstETH (staked ETH) tokens. These wstETH tokens would then be used to invest in Aave V3 on Arbitrum to promote borrowing and benefit from a planned incentive program. The remaining 2,500 ETH would be directed to Fluid’s lending platform on Arbitrum.

Delegates Criticize Exclusion of Arbitrum-Native Projects

While the GMC recommended the plan after reviewing 45 proposals from various protocols, including Arbitrum-native protocols such as Dolomite, GMX, and Camelot, some Arbitrum delegates criticized the exclusion of Arbitrum-native projects. One delegate, JoJo, pointed out that only a small portion of the allocated ETH was directed to projects built on Arbitrum, questioning the DAO’s commitment to supporting its own ecosystem. Another delegate, ultra, expressed disappointment, arguing that the selections indicated that none of Arbitrum’s native projects were considered worthy of funding, despite their similar risk profiles to the selected projects.

DAO’s Reinvestment Plans Moving Forward

The proposal is set to be put to a Snapshot vote on Thursday, where it will require a simple majority of votes with a 3% quorum to go into effect. Ultra has predicted that the proposal will likely be rejected, with the revised plan potentially allocating 5-40% of the funds to Arbitrum-native projects.

As the vote approaches, the GMC and DAO members are divided on how best to balance supporting Arbitrum’s ecosystem while securing yield-bearing opportunities for its treasury.

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.