The Arbitrum Foundation, the body responsible for overseeing the decentralized governance system of the Arbitrum network, has released a statement to clarify its position on the recent controversy surrounding its token allocation process that triggered a 6% drop in the price of the ARB token.
The foundation has come under fire from community members who feel that their concerns and input regarding the proposed allocation of 750 million ARB tokens, as detailed in the Arbitrum Improvement Proposal 1 (AIP-1), were disregarded.
In the statement, the Arbitrum Foundation acknowledged the "lively discussions" taking place on its governance forums and maintained that decentralized governance is working as intended.The organization argued that some decisions must be made before and in connection with a broader launch, and that the goals of AIP-1 were to engage the community and have token holders signal their support via DAO voting.
The foundation has also provided additional context to the recent allocation of 50 million ARB tokens, explaining that 40 million were allocated as a loan to a sophisticated actor in the financial markets space. The remaining 10 million were converted to fiat for operational costs.
Before these clarifications, some members of the community remain skeptical. One such critic is Eden Au, who took to Twitter to voice his concerns, stating that the foundation had already spent 6.7% of the proposed 750 million ARB tokens, even though the community had voted against the proposal.