The Arbitrum Foundation had been selling ARB tokens in exchange for the stablecoin even before its governance community of token holders “approved” the organization’s nearly $1 billion budget, according to a blog post by an employee on Sunday.
Peter McCorry said the foundation is a centralized organization tasked with promoting Arbitrum, a faster and cheaper blockchain for ethereum transactions. The Integrated Governance Package AIP-1 is seen as an approval of decisions already made, such as accepting all 7.5% of ARB tokens.
To that end, the foundation “has begun using these tokens to benefit the DAO, including converting some funds into stablecoins for operational purposes.”
The move to sell ARB tokens ahead of budget approval has raised concerns in the cryptocurrency community. Some critics argue that it undermines the democratic process of token holder governance. They noted that token holders should have the opportunity to vote on budget allocations before the foundation can sell tokens for other currencies. Others, however, see the move as a necessary step to ensure the smooth functioning of the DAO.
The Arbitrum Foundation has yet to issue an official statement on the controversy. However, many have called for greater transparency and accountability from the group, especially as it seeks to expand its influence in the cryptocurrency market.