Arbitrum whales accumulate as foundation amends controversial proposals

Arbitrum whales — large crypto holders often monitored for their potential market impact — continue to stack the Ethereum Layer 2's governance token.

On-chain analysis indicates that Mechanism Capital's Andrew Kang purchased an additional 1.51 million Arbitrum tokens at $1.23 with approximately $1.85 million of USDC, the stablecoin. Kang — also a member of PleasrDAO — has purchased a total of 2.3 million ARB with an average buying price of $1.24 per token, note on-chain analysts at Lookonchain.

Another Arbitrum whale — the largest individual holder of the project's governance token — withdrew 5.85 million ARB tokens ($7.15 million) from the centralized exchange Gate.io. This entity currently holds 17.62 million ARB, worth approximately $21.5 million at current prices.

A third whale purchased 795,381 Arbitrum governance tokens with approximately $1 million in USDC, at a price of $1.26 per token. Its ARB stack currently comprises 10.6 million ARB, worth $12.94 million.

Finally, a fourth whale address saw an inbound transfer of 532,012 Arbitrum governance tokens, worth roughly $661,000 — bringing its total holdings up to 4.58 million ARB, worth approximately $5.59 million.

These purchases follow The Block's previous reporting that Arbitrum whales had mostly held their tokens through ongoing governance drama.

The price of Arbitrum's governance token has, at least temporarily, staved off further declines following a weekend of drama. Source: TradingView

Arbitrum responds to governance concerns

Last weekend, Arbitrum again became the crypto industry's hottest topic after backtracking on a critical governance proposal, Arbitrum Improvement Proposal 1. AIP-1 controversially planned to send 750 million governance tokens, worth around $1 billion at the time, to the Arbitrum Foundation.

More controversially, the proposal appeared set to go ahead without the approval of token holders — who make up the decentralized autonomous organization intended to govern the project — who voted overwhelmingly against the move. 

Arbitrum has detailed plans to incorporate community feedback and implement new AIPs.

For example, the Arbitrum Foundation stated that it "will not move any of the remaining 700 million tokens in the Administrative Budget Wallet until an acceptable budget and smart contract lockup schedule has been approved by the DAO." It also shared a transparency report about the Arbitrum Foundation's initial formation alongside revised proposals AIP-1.1 and AIP-1.2.

AIP-1.1 looks to restrict the Foundation’s spending by adding "a smart contract-enforced lockup schedule that releases linearly over 4 years, further adjustable by the DAO," Arbitrum's Twitter account explained, adding that it "also proposes well-defined budgetary principles and categories, and mandated transparency reports."

AIP-1.2 aims to update core DAO governing documents by lowering the threshold to put forward a proposal to one million tokens, down from five million tokens — an effort to "make governance more accessible."