A controversial proposal seeking the return of 700 million ARB governance tokens to Arbitrum’s DAO Treasury was rejected<\/a> by a massive number of votes on April 15. The Improvement Proposal AIP-1.05 was introduced after the Arbitrum Foundation transferred funds without community approval<\/a> in March.\u00a0<\/p>\n The AIP-1.05 was defeated by 118 million votes, representing 84% of the total votes received, while 21 million ARB tokens voted for the proposal, nearly 14.5% of the total. Around 2 million ARB tokens abstained.\u00a0The proposal asked the Foundation to return the tokens as a \u201csymbolic gesture to demonstrate that the governance holders ultimately control the DAO, not the Arbitrum service provider nor the Foundation.\u201d<\/p>\n On the governance forum, a whale with 4.8 million ARB tokens said<\/a> the proposal “seems to only serve as a power play” that would add an “unnecessary step” and delay the Foundation’s ability “to support the growth of the Arbitrum ecosystem.”<\/p>\n Another whale voting against the proposal with 18 million ARB tokens stated<\/a> that balance is necessary to promote decentralization and progress in the ecosystem:\u00a0<\/p>\n “There is a balance that we need to try to accomplish between advocating for decentralization and preventing progress in the ecosystem. I believe that decentralization on its ideal form is nowhere to be seen in this industry yet.”<\/p><\/blockquote>\n Arbitrum’s community and its Foundation are engaged in a dispute over the Foundation’s governance proposal AIP-1 \u2014 which called for investment of nearly $1 billion<\/a> worth of ARB tokens to fund its operations. After facing community backlash, the Foundation later said<\/a> that AIP-1 was a ratification, not a proposal. It added that some of the tokens were already sold for stablecoins.<\/p>\n The AIP-1 proposal was Arbitrum’s first attempt at governance after its tokens airdrop in early March. The Foundation has already released a new set of improvement proposals<\/a> aimed at reestablishing dialogue with the community.<\/p>\n Magazine:\u00a0The legal dangers of getting involved with DAOs<\/strong><\/a><\/em><\/p>\n<\/div>\n![\"\"](\"https:\/\/s3.cointelegraph.com\/uploads\/2023-04\/e9570c93-29de-470e-b7b9-f3fbf5425317.png\" "\\"\\"")