HashKey Group's raises $50 million venture fund for altcoins as they pivot away from their traditional focus on Bitcoin and Ethereum.
- The Arbitrum DAO passes a $23.54M one-time “backfund” for 26 projects that missed out on the initial round of grant funding.
- With two-thirds of the votes, the initiative aims to incentivize and develop the use of the project’s Ethereum layer 2 network application.
Diverse Projects to Receive Grants from Arbitrum DAO
The 26 projects were approved for a grant from the Ethereum Layer 2 network’s short-term Incentive Program (STIP).
However, they didn’t receive the funds because of the program’s initial 50 million token budget.
With the 29 projects fully funded in the first round, the remaining 26 will now receive funds. The largest receivers are Gains Network (GNS), receiving 4.5 million tokens ($5 million).
Others include Stargate Finance (STG) and Synapse (SYN), which will receive 2 million tokens ($2.2 million) each. Wormhole will also get a whopping 1.8 million tokens ($2 million) from the grants.
The supplementary capital was passed with about 216.7 million votes in favor of it and 73.1 million against it. This brings the STIP’s total budget to 71.4 million ARB tokens.
This round will fund projects that support emerging builders and create a conducive environment for new projects.
According to the proposal, the additional funds will be dispersed after a three-day waiting period.
Grant Approval Decision Met with Controversy
Other projects that received funding in the first round, like Camelot and MUX, were among the one-third of voters who rejected the backfund proposal.
MUX protocol argued that the extra funding will mix projects of varying quality.
Proposal with good protocol fundamentals, proper incentives execution strategies, and reasonable grant size should be supported, but not in a bundle of proposal with mixed quality.Delegates from MUX protocol wrote.
On the other hand, Camelot explained their vote against the proposal in a lengthy comment. It argued that the full second round grant would have been fair rather than a backfund.
The mixed reactions highlight decentralized autonomous organizations‘ continuous dialogue in decision-making processes.
Will the Move Improve Arbitrum’s Ecosystem?
ARB token holders govern the protocol to generate revenue through transaction fees.
DefiLIama data shows that the protocol generated over $180,165 in transaction fees and about $43,342 in revenue just on Dec 1, 2023.
Arbitrum fees totaled $5.93 million in November, and its revenue reached $1.47 million.
The move will improve its ecosystem by rectifying the shortcomings of the initial funding round.
It reflects Arbitrum DAO’s commitment to fostering a robust and diverse ecosystem within its platform.
The protocol is willing to invest substantially in the ecosystem’s growth and recognizes the long-term benefits of a well-supported developer community.
Would this decision play a crucial role in shaping the future of Arbitrum’s ecosystem?