Ever since the extremely successful airdrop of the popular layer-2 scaling solution platform Arbitrum on March 23, there have been some clashes between the community at large and the Arbitrum Foundation over the allocation of tokens. The conflict between the Arbitrum community and the Foundation began soon after the airdrop of the ARB tokens to the community when the Arbitrum Foundation in its first Arbitrum Improvement Proposal (AIP-1) called for funding its operations with 750 million ARB tokens — worth nearly $1 billion.

And in light of that, the Arbitrum community has initiated a fresh proposal requesting the Arbitrum proposal to return the 700 million ARB tokens to the treasury belonging to the Arbitrum decentralized autonomous organization (DAO). This request was raised after the Arbitrum Foundation transferred these funds without receiving any community approval to do the same back in March 2023.

According to the proposal raised by the community, the Arbitrum Foundation should proceed with its budget plan only after returning the tokens to the DAO.

“This is a symbolic gesture to demonstrate that the governance holders ultimately control the DAO, not the Arbitrum service provider nor the Foundation,” said a community member.

This proposal was launched last Friday, April 7, and will end by the end of this week on April 14, 2023. At the time of writing this article, 50.49% stood in favor of the proposal while a close 47.95% stood against it. About 1.57% abstained from the vote.

About 4 more days are left for this voting to end and things may change dramatically going forward as more and more users cast their votes in the matter.

Earlier last week, while facing flack from the community, the Arbitrum Foundation in an April 2 forum post, said that AIP-1 was only a ratification and not a proposal while adding that some of the tokens were already sold for stablecoins. At the time of the post, the foundation also noted that its symbolic first governance attempt was a failure due to communication problems and "decisions were clearly not articulated correctly."

But soon after the Arbitrum Foundation released a set of new AIPs which were aimed at restoring the community dialogue. These new proposals included AIP-1.1, which included a smart contract lockup schedule, spending, budget, and increased transparency. The other, AIP-1.2 aimed to amend current founding documents and lower the proposal threshold from 5 million ARB tokens to 1 million ARB, to make "governance more accessible."

However, despite these moves by the foundation in the new set of proposals, the community of token-holders in the ARB ecosystem was not satisfied. According to the proposal,

“The foundation has unilaterally been allocated $750M tokens from the DAO that was not approved by the governance tokenholders. Any funds must be returned until it has been properly allocated by the DAO and the DAO only.”

This would remain to be a bone of contention between the community and the Arbitrum Foundation until the completion of this vote and the eventual return of the 700 million ARB tokens back to the DAO treasury.