During the weekend, the Arbitrum crypto community was met with a wave of concern and uncertainty surrounding the recently launched ARB token. Speculation arose among holders that the Arbitrum Foundation had sold a significant portion of the coins, leading to panic calls and FUDs. The situation prompted a professional response from the community as they sought to clarify the situation and address any concerns.
Cringe.eth, a prominent Twitter account in the crypto community, brought attention to the fact that the Arbitrum Foundation transferred a staggering 750 million ARB, valued at almost $1 billion, on the day of its launch, March 16. Furthermore, a portion of this amount was sent to the Binance crypto exchange.
In addition, Eden Au, a distinguished research director at a prominent Web3 firm, has reported that the Arbitrum Foundation recently submitted a proposal, AIP-1, to utilize the relocated tokens for administrative and operational expenses. Nevertheless, 70% of ARB holders voted against the proposal, deeming it a formality. The researcher substantiated this claim by sharing blockchain data that revealed the transfer of a staggering 50.5 million ARB from the foundation.
Significantly, these incidents hurt the value of ARB, causing it to plummet from approximately $1.5 to almost below one dollar. Furthermore, the community leveled allegations against the foundation for intentionally unloading the tokens on them shortly after the launch.
Arbitrum recently released a comprehensive thread on Sunday outlining the objectives of AIP-1. The primary aim was to foster community engagement and encourage token holders to signal their support for initial decisions. Additionally, the blockchain data indicating a 50 million ARB sale was clarified to need to be more accurate. The statement was made professionally, providing clarity and transparency to the community.
The foundation has successfully allocated 40 million ARB tokens as a loan to a highly sophisticated financial market player. Additionally, the remaining 10 million ARB tokens were converted to fiat currency to cover operational expenses. This strategic move ensures the foundation’s continued success and stability in the market.
