Arbitrum's ARB Drops in Price Due to Failed First DAO Vote (2023)

Arbitrum's recently released ARB coin fell over the weekend as the network struggled to resolve a governance issue caused by the failure of its DAO's first vote.

Arbitrum initially indicated that the vote was basically meaningless, but changed its stance on Sunday in response to mounting criticism.

The beginning of this month saw the debut of the ARB governance cryptocurrency and the leadership of theEtherealscaling solution by announcing that it was creating a decentralized autonomous organization, or DAO.

What is the decision?

Ethereum has quickly gained popularity as a framework for building decentralized applications (dApps). Unfortunately, the network is facing a number of challenges as a result of the sharp increase in usage, including poor user experience (UX) caused by high transaction or oil costs and slow transaction speeds. The Ethereum community has introduced a method called Arbitrum to solve problems on the network.

Arbitrum is a Layer Two (L2) digest technology that provides fast performance and was created by Offchain Labs.

The Layer 2 solution initiative called Arbitrum aims to increase the speed and scalability of Ethereum smart contracts, as well as introduce more private features.

The platform is designed to make it simple for developers to make Layer 2 Ethereum Virtual Machine (EVM) contracts and transactions, while taking advantage of Ethereum's excellent Layer 1 security.

To solve some of the problems with existing Ethereum-based smart contracts, Arbitrum was developed. As for the negatives, these include long agreements and expensive implementation.

How it works?

The transaction summary is a method used by Arbitrum to record groups of transactions sent to theEtherealmainchain and run them on low-cost and scalable Layer 2 sidechains. This procedure enables a new class of trusted Layer 2-based aApps, while alleviating most of the processing and storage load that Ethereum currently supports.

By sending communications between smart contracts and those at the second layer of the Arbitrum chain, this technology enables Ethereum smart contracts to grow.

Also, Layer 2 will handle most of the transaction processing and Arbitrum will document the results on the mainnet. Through this procedure, the operating speed and efficiency of the system can be significantly increased.

Any verifier can subsequently submit a cumulative block and validate the legitimacy of another block. The process of rebuilding the entire history of the chain from logs optimized using public information is known as "rollup" and is described by the word. The procedure ensures that the code will execute correctly.

How does the ARB token work?

The value of the coin is derived from its function within ArbitrumDAO. By voting on ideas like AIP-1, which outlines the structure of the DAO itself and its associated Foundation, ARB owners can influence the fate of the network.

At the time of writing, more than 78% of the ARB tokens used to vote on the AIP-1 plan were sent against it. The AIP-1 plan was initially described by an Arbitrum staffer named Patrick McCorry as more or less a formality.

Communication error or misunderstanding?

In a blog post, Arbitrum staff member Patrick McCorry stated:

We believe that much of the negative opinion on AIP-1 was due to misunderstandings about the idea that AIP-1 is an approval and not a proposal. When decentralizing a network, there's a chicken-and-egg [problem] that needs to be resolved, and the purpose of AIP-1 was to make the community aware of all the choices that were made upfront.

Community resistance and votes against the plan seemed futile because the actions outlined in AIP-1 had already been taken.

1/ There is a very lively discussion in the Arbitrum governance forums about AIP-1. Decentralized governance is working as expected. We are all one community and fierce public discourse will produce the best results.

🧵👇

— Referee (💙,🧡) (@árbitro)April 2, 2023

A well-designed technology

The engineering behind Arbitrum is quite impressive, and this governance setback should in no way be construed as diminishing the technological strength of this project.

The Arbitrum network allows the participation of individual servers, like many other blockchains. Tier 1 transactions are combined with the assistance of validation nodes, which monitor the state of the chain and full nodes. While other user transaction fees are distributed to other network users such as validators, aggregators that transmit transactions to the Tier 1 chain receive rewards in ETH.

Other validators verify the accuracy of the blocks and issue a "challenge" if they believe it is not, as part of the challenge phase of the Tier 2 solution design for block accumulation. If the challenge is overturned or the block is found to be incorrect, the rogue verifier's assets will be seized. This procedure ensures that each verifier always complies with the rules and takes responsibility for their actions.

The Arbitrum virtual computer, a bespoke virtual computer, is also available on the platform. (AVM). Sitting on top of EthBridge, a smart contract library that communicates with the Arbitrum network, the AVM is where Arbitrum's smart contracts run. smart contracts forEtherealthey are immediately converted to operate on the AVM.

A way forward?

To try to find a solution to this conundrum, Arbitrum announced on Sunday that it would split AIP-1 into separate parts that would be voted on separately, essentially doing a U-turn in response to criticism.

1) AIP-1 is very large and covers many topics. We will follow the advice of the DAO and divide the AIP into parts. This will allow the community to discuss and vote on the different subsections.

— Referee (💙,🧡) (@árbitro)April 2, 2023

The distribution of 750 million ARB tokens to the Arbitrum Foundation for donations, payment of service providers, and coverage of administrative and operational expenses has drawn the most criticism of any part of AIP-1.

In McCorry's article, the figure's rationale was compared to comparable choices made by other chains. The foundation already

began using these coins on behalf of the DAO, including converting some cash into stablecoins for operational reasons.

Arbitrum later explained on Twitter that approximately $10 million worth of ARB was converted into stablecoins. Subsequently, Arbitrum claimed that its Foundation had "no near-term intentions to sell more tokens" and reiterated its claim that it "sold enough to fund its current running costs" in a discussion of how AIP-1 would be divided. in separate proposals. .

According to Arbitrum, it also intends to introduce regulations to deal with open issues around the potential use of tokens given to the Foundation.

3) AIP-1 does not discuss transparency about how resources will be spent. As part of the AIP budget, we will be proposing transparency reporting to increase community awareness of how funds are being spent over time.

— Referee (💙,🧡) (@árbitro)April 2, 2023

price fluctuations

During the network change on Sunday, the ARB price fell as low as $1.15, or 11.5%, before rising back to $1.19, according to CoinGecko. ARB is currently ranked 41st in terms of market capitalization and has a total market capitalization of around $1.5 billion.

On March 23, Arbitrum launched its new ARBcryptocurrency, and a Dune monitor shows that more than 550,000 digital wallets have bought more than 1 billion ARBs.

Offchain Labs created Arbitrum as a scalability option for Ethereum. By handling transactions on a different network and then sending your receipts in bulk to Ethereum, the goal is to make Ethereum transactions more accessible and faster. However, it also keeps processing fees to a minimum at the same time.

This incredibly efficient accrual technology allows Arbitrum to keep expenses to a minimum. While transaction costs are reduced, the initiative still provides sufficient incentives for validators.

However, since this is a new technology, investors are cautioned that it is important to note that this is fundamentally untested territory and security issues are likely to exist before they are resolved. In February, for example, a stablecoin based on Arbitrum was launched.victim of a well-planned smart contract scam, which caused users to lose approximately $2 million from their accounts. afterHope Finances tweetBy informing users about the fraud, the famous security company Web3 CertiK drew attention to the event.

TMS Network (TMSN) pre-sales increase by more than 1,300%

Amid Arbitrum (ARB) Troubles, The Crypto Community Noticed An Extraordinary 1,300% Increase Inred TMS(TMSN), which generated expectation among distributors and buyers. The TMS Network (TMSN) would offer investors and traders a fully decentralized marketplace with a portfolio spanning all major asset classes.

TMS Network uses Ethereum smart contracts to provide premium services such as real-time on-chain statistics, trading calls, and arbitrage referrals to users purchasing TMSN coins. Through its own system of trading bots, TMS Network (TMSN) offers its clients the ability to trade 24/7. With the help of this feature, traders can close deals even when they are not near their devices. Through its price aggregator, TMS Network (TMSN) also promises its customers the best deals available in various markets.

TMS Network (TMSN) is currently selling coins at $0.046 during the second phase of its pre-sale. TMS Network (TMSN), which sold over $500,000 worth of securities during the early pre-sale stage, is becoming increasingly popular among savvy investors in cryptocurrency as a top investment option.

For more information about the TMS Network (TMSN), you canvisit the presalepage onhttps://presale.tmsnetwork.io.

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