New York-based Offchain Labs, the development team behind Arbitrum, a layer-2 scaling solution for Ethereum, has moved 2.679b ARB, worth over $3.7b, on-chain data on Apr. 1 indicates.
The ARB transfer to a custodian
According to Arkham Intelligence, an analytics firm, the large sum of ARB, making up 27% of the total supply, was moved on early Apr. 1.
It was roughly a day after Offchain Labs notified the community of their intention to transfer assets to an unnamed custodian.
The 2.679b ARB will be locked for four years. The team can only use this stash to vote on governance proposals during this time. Furthermore, they won’t sell any ARB, a positive development for holders since the move would decrease the circulating supply of the token, increasing scarcity.
Still, there are concerns that Arbitrum and Offchain Labs are “legally” locking these tokens without an agreement on code.
It is why some community members are worried that tokens, though moved to a custodian, remain under the control of the project.
Besides, there are more who think even with the tokens locked in a custodian but the project having access to these tokens when voting on proposals introduces a level of centralization.
Is there centralization in Arbitrum?
Beyond this transfer, critics have been tearing in on Arbitrum. A dig deeper into their token ownership shows that over $1b, or 750m ARB, are controlled by three addresses under the Arbitrum Foundation.
The 750m, which represents 7.5% of the total supply, the foundation claims will be used to cater for administrative costs, including making special grants and “reimbursing applicable service providers for the Total Setup Costs.”
Even so, no clear details exist on how grants will be issued or the funds managed. Moreover, as laid out by the Arbitrum Foundation’s documents, 4.278b ARB was meant to be sent to the Arbitrum DAO treasury, but only 3.527b have been sent. The 750m was also sent without initial voting.
From Mar. 23, Arbitrum started distributing ARB tokens to users in an airdrop. Within the first hour, Nansen data shows that over 42m ARB from 230,000 addresses claimed the token. ARB has a total supply of 10b.