Arbitrum whales mostly holding through governance drama

Arbitrum governance took center stage over the weekend before its self-titled foundation walked back the problematic proposal AIP-1 and its "ratification" vote for financial actions it had already taken.

Conceding that AIP-1 was unlikely to pass after votes flooded in against the proposal, the Arbitrum Foundation now plans to divide the dense AIP into smaller segments.

"AIP-1 is too large and covers too many topics," it tweeted, adding: "We will follow the DAO’s advice and split the AIP into parts. This will allow the community to discuss and vote on the different subsections."

The drama caused a noteworthy decline in the price of Arbitrum's governance token — which is down approximately 5% over the past 24 hours.

The price of ARB declined over the weekend amid drama surrounding AIP-1.

Arbitrum whales aren't selling

Despite the Sunday price declines, on-chain analysis shows that many proverbial whales — large holders often exhibiting market-swaying influence — are reluctant to sell.

Arbitrum whale 0xe04d has yet to make any sales after purchasing ARB governance tokens on Binance three days ago. They currently hold 4,048,948 tokens.

Another Arbitrum whale, 0xadf5, also has yet to make any sales after purchasing ARB governance tokens on OKX three days ago. It currently holds 4,099,518 tokens worth $4,837,431.

Meanwhile, Arbitrum whale 0xa252 received approximately 676,000 tokens from Binance around noon EDT. Its ARB hoard currently totals 1,679,798 tokens, which on-chain analysis account Lookonchain notes were purchased at an average cost of $1.24 per token.

The largest Arbitrum buyer, 0xb154, still holds 9.94 million tokens at an average buying cost of $1.26, according to Lookonchain, after adding a somewhat-negligible 111 tokens late last night.

(But some are)

Not every Arbitrum whale is holding, however. 0x1dd9 realized a loss of approximately $141,000 after selling 2.03 million tokens for ether at an average price of $1.15 — though it still holds 500,102 ARB.

Most recently, just hours ago, whale 0x09d4 sent 700,000 Arbitrum governance tokens to Binance. Their average buying cost was $1.41, according to Lookonchain, and they still hold 1,215,453 tokens.

'Decentralization theatre'

Though whales currently appear to be holding onto their governance tokens, generally speaking, The Arbitrum Foundation has gained its fair share of critics.

In response to what some view as "decentralization theatre," The Arbitrum Foundation says it will propose transparency reports to illustrate better how funds will be spent. It will also rename its special grants program "Ecosystem Development Fund."

"We believe that having a Foundation that is empowered to act in the service of the DAO is important for Arbitrum's success," it tweeted, adding: "We clearly could have communicated that better, and will take this opportunity to improve and continue to build Arbitrum as the most community-centric L2."