Last weekend was a tumultuous period of time for the DeFi community due to the first governance proposal of Arbitrum Foundation. It all started with a proposal called AIP-1 that asked for transfer of 750 million ARB tokens worth nearly $1 billion to a “Special Grants” program.
A team of three directors would be responsible to determine who receives the grants, when and how many ARB tokens are distributed to them. With no mention of security or oversight from the community, no provision to vote on grant allocations, and this makes it questionable and garners criticism from the community of ARB holders and DAO proponents in the crypto ecosystem. AIP-1 has resulted in a significant drop in the price of ARB, which is trading around $1.16 on CoinMarketCap.
Although Arbitrum has received a lot of criticism, on-chain data from Arbiscan showed that most whales – who hold large amounts of tokens – still have no intention of selling off their ARB tokens. Arbitrum whale 0xe04d has not sold any ARB after this person bought a large amount of ARB on Binance 3 days ago. Currently, this wallet holds 4,048,948 ARB tokens.
Another Arbitrum whale with wallet address 0xadf5 also chooses to hold their ARB tokens after buying on OKX 3 days ago. This wallet currently holds 4,099,518 tokens, worth about $4.8 billion. Meanwhile, wallet 0xa252 received around 676,000 tokens from Binance, still holding a total of 1,679,798 tokens. Arbitrum whale 0xb154 still owns 9.94 million ARB with an average purchase price of $1.26 per token, according data from Lookonchain.
However, not all Arbitrum whales choose to hold tokens. 0x1dd9 has lost $141,000 after selling 2.03 million tokens for $1.15, although there is still 500,102 ARB in the wallet. Whale 0x09d4 recently sent 700,000 ARB to Binance and still holds about 1.2 billion tokens in their wallet.
Although many whales have yet to sell off their tokens and the project pledges no near-term ARB sales, Arbitrum Foundation has caused many people to lose faith in the project.