🥛 Arbitrum's Butt Fumble 👀
- Writer Milk Man
- April 3, 2023
- •4 Min Read
GM. This is Milk Road, the crypto newsletter that's like having a secret weapon in your back pocket. You never know when you'll need it, but you'll be glad you have it when the time comes.
Here's what you missed over the weekend:
- Arbitrum's Butt Fumble: The AIP-1 Proposal 🏈
- Uncle Sam is selling $1B+ worth of Bitcoin 💰
- NFT artist gets put on Russia's Most Wanted List 🍪
Today's edition is brought to you by Origin, the go-to platform for getting your NFT business off the ground.
ARBITRUM'S BUTT FUMBLE: THE AIP-1 PROPOSAL 🏈
Arbitrum launched its governance proposal (AIP-1) over the weekend. It was the first time ARB token holders would get to vote on the future of the blockchain.
How’d it go? Terrible - there was a ton of controversy, token holders were pissed, and the ARB token dropped ~12% within 24 hours.
I haven't seen a play executed this poorly since the Butt Fumble, when Mark Sanchez fumbled the ball after running full speed into
a defender his own teammate's butt.
Arbitrum's Butt Fumble looked like this:
So how did it happen? Here’s the play-by-play:
- Last month Abritrum launched its first token (ARB). The goal? Make the blockchain more decentralized and give Arbitrum DAO (i.e. token holders) the power to govern.
- Over the weekend, the AIP-1 proposal dropped. It included stuff like: the structure of the DAO and an allocation of 750M ARB tokens (7.5% of the total supply) going to the foundation for “special grants” and operational costs.
- 83% of ARB holders voted AGAINST the proposal. The biggest point of controversy was the 750M ARB tokens (worth $1B) going to the Arbitrum team.
- The Arbitrum Foundation then said it wasn’t a proposal, it was a “ratification." Which kinda sounds like that thing that's happening in New York City, but it just means that AIP-1 wasn’t a real “proposal” and people’s votes didn’t matter.
- Arbitrum also admitted that they had already transferred 50M ARB tokens out. 40M tokens were sent to a “sophisticated actor in the financial markets space” and 10M was “converted to fiat." (Fancy, BS-way of saying: “we sold.”)
Why this matters: Arbitrum is the most popular Layer 2 blockchain right now.
So it was a big moment when it decided to launch a token, a DAO, and give holders a way to have a say in the future of the blockchain (i.e. vote on proposals, etc). Turns out that idea didn’t last long, or at all...
The first proposal ended up being a huge pump fake and many believe Arbitrum's new governance has already failed. It's like marrying someone, suggesting to use their money to buy a new mansion, and then after they say no, you hit them with the "well, I already sent the down payment." It ain't a good start to the marriage...
So what now? Arbitrum recently apologized for the miscommunication and plans to release new proposals this week - including being able to vote on the 750M ARB tokens.
We’ll have to wait and see if Arbitrum can recover, or end up out of the league like Mark Sanchez after his Butt Fumble.
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THE U.S. GOV'T IS SELLING $1B+ OF BITCOIN 💰
Uncle Sam is going on a Bitcoin-selling spree. In a new court filing, the Department of Justice (DOJ) revealed that it sold 9,861 Bitcoin for $215M.
The DOJ also announced it will sell another ~41,500 BTC in four more batches over the course of this year.
So, where'd Uncle Sam get so much Bitcoin? Silk Road - an online black marketplace where people could buy crazy, illegal stuff using crypto.
(Btw - yes, we named our newsletter after it as a joke. No, we aren't affiliated with it in any way. My lawyer is giving me the side-eye until I clear that up.)
Over 50,000 BTC was seized after the Silk Road shut down and now the U.S. government is planning to sell it.
So what? Some people think that 50,000 BTC hitting the market could add sell-pressure and bring the price of Bitcoin down.
The reality is it's hardly a drop in the ocean where crypto whales eat that much Bitcoin for breakfast. So, we aren't too worried about it.
But it's all pretty funny. One week, the U.S. government sells $200M+ on Coinbase... and the next week, the U.S. government says "crypto has no value" and sends Coinbase a Wells Notice for breaking the law.
MILK & COOKIES 🍪
The leader of Pussy Riot, Nadya Tolokonnikova, has been put on Russia’s Most Wanted List for an NFT. The Russian government says the NFT “hurt the religious feelings” of the people of Russia. You can’t make this sh*t up…
USDC has seen $10B in outflows since Silicon Valley Bank collapsed. USDC’s market cap is now down 42% from its all time high. The big winner from it? USDT - it now represents 60% of the stablecoin market.
Yuga Labs has officially appointed Daniel Alegre as its new CEO. Alegre was the former COO at Activision and worked on games like Call of Duty, World of Warcraft, and Candy Crush. (A grandparent favorite)
Flybondi becomes the first airline to launch flight tickets as NFTs. Now every purchased ticket will be issued as an NFT on the Algorand blockchain.
MILKY MEME 🤣
That's a wrap for today. Meet us on Twitter to talk all about it. It’s kinda like a family BBQ but better - no screaming kids, awkward photos, or drunk uncles telling weird stories (@MilkRoadDaily)
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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.
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