Members of the decentralized autonomous organization Arbitrum are discussing the potential recovery of unused funds allocated for gaming ecosystem development, citing a lack of progress and transparency.
Proposal for Fund Recovery
On March 24, DAO member Nathan van der Heyden submitted a proposal for the clawback of unused funds allocated to the Arbitrum Gaming Catalyst Program (GCP). Launched in 2024, the program aimed to establish Arbitrum as a leading platform for on-chain gaming development. Van der Heyden noted that the projections for the program were overly optimistic and unsustainable.
DAO Members' Opinions
Some DAO members support the immediate recovery of funds, emphasizing the need to protect assets and restore investor confidence. Others argue that a full clawback is overly harsh and propose alternative approaches, such as phased recoveries and flexible reporting standards.
Economic Consequences
Since the inception of the GCP, the price of Arbitrum tokens has fallen by 81%. Launched in March 2024, the program allocated around 225 Arbitrum tokens to support Web3 gaming growth. However, coinciding with a $2.2 billion token unlock, the value of the allocated funds has decreased by more than 50%. Amid such declines, another project, ZKsync, has suspended its reward program due to market conditions.
While discussions about the future of the GCP are ongoing in the Arbitrum DAO, amidst a broader decline in Web3 gaming investments, investors are becoming more cautious, favoring projects that can demonstrate long-term viability.
