Arbitrum's ARB falls in price due to failure in the 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 its DAO's first vote, which appeared to have failed.

Arbitrum initially pointed out that the vote was essentially meaningless, but changed its position on Sunday in response to mounting criticism.

Earlier this month saw the debut of the ARB governance cryptocurrency and leadership of theEtherealScaling solution by announcing to create a Decentralized Autonomous Organization (DAO).

What's the decision?

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

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

The Layer 2 solution initiative called Arbitrum aims to increase the speed and scalability of Ethereum smart contracts while introducing more private features.

The platform was designed to make it easier for programmers to execute Ethereum Virtual Machine (EVM) contracts and transactions at Layer 2 while leveraging Ethereum's excellent Layer 1 security.

Arbitrum was developed to solve some of the problems with existing Ethereum-based smart contracts. The negatives include lengthy agreements and expensive implementation.

How it works?

Transaction accumulation is a method used by Arbitrum to record groups of transactions sent toEtherealmainchain and run them on low-cost and scalable Layer 2 sidechains. This technique enables a new class of trusted Layer 2-based aApps while reducing most of the processing and memory load that Ethereum currently supports.

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

Also, Layer 2 handles most of the transaction processing and Arbitrum documents the results on the mainnet. This process can significantly increase the working speed and efficiency of the system.

Each verifier can then submit a cumulative block and validate the legitimacy of another block. The process of reconstructing the history of an entire chain from records tweaked using public information is called "digesting" and is described by the word. The procedure ensures that the code runs correctly.

How does the ARB token work?

The value of the coin is derived from its function within the 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.

As of this writing, more than 78% of the ARB tokens used to vote on the AIP-1 plan have been submitted against. The AIP-1 plan was originally described by an Arbitrum employee named Patrick McCorry as more or less a formality.

Miscommunication or Misunderstanding?

In a blog post, Arbitrum contributor Patrick McCorry explained:

We believe that much of the negative opinion about AIP-1 stems from a misconception that AIP-1 is an approval and not a proposal. When it comes to decentralizing a network, there is a chicken-and-egg problem that needs to be addressed, and the purpose of AIP-1 was to inform the community of any decisions made up front.

Community opposition and voices against the plan seemed futile since the actions outlined in AIP-1 were already in place.

1/ There is a very lively discussion on the Arbitrum Governance forums regarding AIP-1. The decentralized governance works as intended. We are all one community and vigorous public discourse will produce the best results.

🧵👇

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

A well thought-out technology

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

The Arbitrum network allows individual servers to participate, as do many other blockchains. Layer 1 transactions are combined using validation nodes that monitor the health of the chain and the full nodes. While other users' transaction fees are distributed to other network users such as validators, aggregators that transmit transactions to the Layer 1 chain are rewarded in ETH.

Other validators verify the accuracy of the block and issue a "challenge" if they believe it is not true, as part of the challenge phase of the Layer 2 block accumulation solution project. If the challenge is overturned or the ban is found false, the fraudulent verifier's assets will be confiscated. This procedure ensures that each inspection body always complies with the rules and takes responsibility for their actions.

The virtual machine Arbitrum, a bespoke virtual machine, is also available on the platform. (AVM). The AVM sits atop EthBridge, a smart contract library that communicates with the Arbitrum network, and is where Arbitrum's smart contracts run. smart contracts forEtherealthey are immediately converted for operation on the AVM.

A way forward?

To find a way out of this dilemma, Arbitrum announced Sunday night 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 too big and covers too many topics. We will follow the advice of the DAO and break the AIP into parts. This allows the community to discuss and vote on the different subsections.

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

The distribution of 750 million ARB tokens to the Arbitrum Foundation to provide grants, pay service providers, and cover their administrative and operational costs has drawn the most criticism from all quarters of AIP-1.

In McCorry's article, the rationale for the number was compared to comparable decisions made by other networks. The Foundation has already done so

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

Arbitrum later explained on Twitter that about $10 million worth of ARBs had been converted into stablecoins. Arbitrum subsequently claimed that its foundation had "no near term intentions to sell any more tokens" and reiterated its claim that it "only sold enough to fund its ongoing running costs" in a discussion of how AIP-1 would be broken down into proposals. separated. .

According to Arbitrum, it also intends to introduce regulations to openly address issues surrounding the possible uses of the tokens granted to the foundation.

3) AIP-1 does not discuss transparency about how funds are spent. As part of the AIP budget, we will be proposing transparency reports so the community knows how funds are being spent over time.

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

price fluctuations

During Sunday's network turnaround, ARB price fell as low as $1.15, or 11.5%, before bouncing back to $1.19, according to CoinGecko. ARB currently ranks 41st in terms of market capitalization and has a total market value of around $1.5 billion.

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

Offchain Labs developed Arbitrum as a scalability option for Ethereum. By settling transactions on another network and then forwarding their receipts to Ethereum in bulk, they aim to make Ethereum transactions more affordable and faster. At the same time, it also keeps processing fees to a minimum.

This incredibly efficient accrual technology allows Arbitrum to keep spending to a minimum. Although transaction costs are reduced, the initiative still offers validators enough incentives.

However, as this is new technology, investors should keep in mind that it is fundamentally untested territory and security issues are likely to exist before they are resolved. In February, for example, an arbitrum-based stablecoin took placeVictim of a well-planned smart contract scam, which caused users to lose around $2 million from their accounts. after aHope Finance-PaketThe famous Web3 security company CertiK informed users about the scam and drew attention to the event.

TMS Network (TMSN) Presales up over 1,300%

Amid troubles with Arbitrum (ARB), the crypto community has seen an extraordinary 1300% surgeRotes TMS(TMSN), which has raised expectations among dealers and buyers. TMS Network (TMSN) would offer investors and traders a fully decentralized marketplace with a portfolio spanning mainstream asset classes.

TMS Network uses Ethereum Smart Contracts to provide premium services such as real-time on-chain stats, trading calls, and arbitrage ads to users buying TMSN coins. Through its own system of trading bots, TMS Network (TMSN) offers its clients the opportunity to trade 24/7. This feature allows merchants to conduct transactions even when they are away from their devices. Through its price aggregator, TMS Network (TMSN) also promises its customers the best deals available across a variety of markets.

TMS Network (TMSN) is currently selling coins for $0.046 during the second phase of its pre-sale. TMS Network (TMSN), which sold over $500,000 worth of securities in the first phase of the pre-sale, is gaining popularity among seasoned cryptocurrency investors as one of the best investment options.

For more information about the TMS network (TMSN), seeVisit the presaleside tohttps://presale.tmsnetwork.io.

Related

• The award was endowed with 2 million US dollars
• Arbitrum Airdrop: Arbitrum (Arb), Ethereum (Eth) and Tms Network (Tmsn) will increase soon
• TMS Network (TMSN) Presale Surges Over 1000% as Avalanche (AVAX) Investor Hope Boosts Amid Disorderly Arbitrum (ARB) Crypto Airdrops