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Decentralization and governance go hand in hand. Since Bitcoins inception, crypto maximalists have embraced core components of decentralization, and while governance isnt called out specifically in the Bitcoin whitepaper, its considered one of the largest elements of decentralized environments throughout the crypto ecosystem.

Were fifteen years removed from the Bitcoin whitepaper, and the concepts surrounding governance are certainly as loud as theyve ever been. But its not all in unison. One of the hottest chains on the block, Arbitrum, was host to some governance-related drama over the weekend.

The Arbitrum token (ARB) is less than a month since its public inception (the chain of course, has been around much longer) and is already in the focal point of drama a true crypto moment.

The chains first DAO proposal (or at least what many seemed to perceive as such) went live last week, and community members voted against AIP-1: Arbitrum Improvement Proposal Framework by a count of 100M ARB tokens to 16M tokens (with 14M abstaining).

A major point of disagreement lied in the token allocation assignment, which detailed 750M tokens begin allocated to the Foundation roughly 7.5% of the total allocation. However, despite the vote not being passed, the 750M tokens had actually already been moved to the Foundation, which argued that AIP-1 was a notice (or as they described it, a ratification) rather than a vote. Arbitrum is effectively telling community members the tokenomics, not asking for them which in fact is quite common (well, the tokenomics part) just not through these means.

Life, death, taxes and yes, token allocation disagreements. But this one had a new twist.

As our team at Bitcoinist outlined the movement behind the ARB tokens price action earlier in the day on Monday; the token took a ~20% dip and then rebounded, which many would argue is a better than expected performance. Total value locked on Arbitrum has largely gone untouched as well, showing optimism from the defi crowd, sitting at over $2.2B at time of publishing.

Beyond just the numbers, the situation surrounding Arbitrum reflects a need for greater communication between Foundations and their communities at large; broadly, crypto communities have generally accepted and unprovoked token allocations for Foundations with the understanding that there needs to be some sort of capital allocation for organizers to operate.

Regardless of your stance on tokenomics, proper communication with community stakeholders is critical and largely the root of this situation but certainly isnt irreparable damage for the chain.

Go here to read the rest:

Is Governance All It's Chalked Up To Be? Arbitrum's First Governance Vote Sparks Debate | - Bitcoinist