A Lido DAO proposal to secure a 5 million ARB grant worth just over $4 million has been met with hefty opposition from the Arbitrum community.
The primary concerns? The grant’s size and ongoing concerns of Lido’s purported centralization.
In September, the Arbitrum Foundation introduced its Short-Term Incentive Program (STIP) to distribute 50,000,000 ARB worth $41.2 million and entice projects to launch on the speedy layer-2.
Arbitrum is a layer-2 scaling solution built atop the Ethereum network. It leverages Ethereum's security while processing transactions without the scalability limitations of the layer-1 blockchain.
Seraphim Czecker, a contributor at Lido Finance, introduced the $4 million grant proposal, with voting set to conclude on October 13.
Lido Finance is a liquid staking platform that lets users stake their idle Ethereum.
To achieve a quorum, each vote requires 71.5 million ARB tokens. As of now, however, only 69.6 million ARB stakeholders have cast their votes.
With just two days remaining, the decision is nearly evenly split, with 48.3% of voters in favor of the proposal and 47.4% voting against it.
Czecker expressed disappointment with the results, saying “it is a bit saddening” that the vote has been such a contentious one. Adding Lido Finance’s staked Ethereum “could be a huge value add to Arbitrum,” he added.
Lido Finance staked Ethereum stETH represents a user's staked Ethereum via Lido. The token accrues staking rewards, and can be rehypothecated throughout DeFi.
Czecker told Decrypt that the grant would also “incentivize stETH migration from mainnet to Arbitrum” without “staking more ETH” and challenges the idea of “Lido being a risk to the ecosystem.”
However, Bob Rossi, an Arbitrum DAO delegate, commented that the proposals should focus on “up-coming projects” or projects “that look to build the space on the whole, not singular tokens.”
Another voter added, "I cannot support a grant for a protocol that places the credible neutrality of the entire Ethereum network at risk for the sake of a small amount of additional profit.”
Arbitrum proposals abound
According to data compiled by Inspex and verified by Decrypt, 95 proposals are currently active on Arbitrum DAO’s Snapshot page asking for a total of 100.2 million ARB tokens worth over $80 million.
Only GMX, MUX Protocol, Gains Network, Vertex Protocol, Radiant Finance, and Camelot have asked for more than 2 million ARB tokens. These are likely to be approved.
Besides Lido DAO, the Arbitrum community has cast majority votes against Wormhole’s proposal, from Synapse, and even Curve Finance among a few others.
Curve Finance asked for 1.6 million ARB tokens. However, some community members highlighted that its community had not used the 3.4 million ARB they received from the Aribtrum airdrop earlier this year.