In a high-stakes showdown, Lido Finance’s ambitious proposal to secure a $4 million ARB grant has ignited fierce opposition within the Arbitrum community. The battleground centers around two key concerns: the substantial grant’s size and the persistent apprehensions regarding Lido’s perceived centralization.
In a strategic move, the Arbitrum Foundation unveiled the Short-Term Incentive Program (STIP) in September. This program offers a whopping 50,000,000 ARB tokens valued at $41.2 million, aiming to entice projects into embracing the rapid layer-2 solution.
Arbitrum, a layer-2 scaling innovation integrated with the Ethereum network, harnesses Ethereum’s security while sidestepping the scalability limitations of the layer-1 blockchain.
At the heart of the controversy is Seraphim Czecker, a prominent contributor to Lido Finance, who introduced the bold $4 million grant proposal. Voting on this critical matter is set to conclude on October 13.
Lido Finance, a liquid staking platform, empowers users to stake their dormant Ethereum holdings.
The voting process hinges on achieving a quorum, with each vote demanding 71.5 million ARB tokens. Presently, only 69.6 million ARB stakeholders have cast their votes, and the verdict hangs in the balance. As it stands, 48.3% of voters favor the proposal, while 47.4% oppose it.
Czecker expressed his disappointment, lamenting the contentious nature of the vote. He passionately believes that Lido Finance’s staked Ethereum could bring substantial value to Arbitrum.
Notably, Lido Finance’s staked Ethereum, known as stETH, represents users’ staked Ethereum holdings. This token accumulates staking rewards and can be reutilized within the DeFi ecosystem.
Despite these hopes and aspirations, Bob Rossi, an Arbitrum DAO delegate, argued that grant proposals should prioritize projects that contribute to the broader ecosystem’s growth, rather than focusing on individual tokens.
One concerned voter succinctly expressed the fear that the proposed protocol could compromise the credibility and neutrality of the entire Ethereum network for a relatively small profit.
In the broader context, the Arbitrum community is abuzz with a multitude of proposals, with a total request of 100.2 million ARB tokens, equivalent to over $80 million. Notably, several projects, including GMX, MUX Protocol, Gains Network, Vertex Protocol, Radiant Finance, and Camelot, are vying for grants exceeding 2 million ARB tokens and are poised for approval.
However, Lido DAO is not the only one facing stiff opposition, as the Arbitrum community has also cast majoritarian votes against proposals by Wormhole, Synapse, Curve Finance, and others.
Curve Finance, which sought 1.6 million ARB tokens, faced scrutiny from some community members who raised questions about the community’s use of the 3.4 million ARB tokens they received from an Aribtrum airdrop earlier this year.
This intense debate over grant proposals underscores the growing significance and influence of projects within the Arbitrum ecosystem.