Arbitrum DAO member proposes $120 million recall from gaming fund that missed deadlines

A proposal passed in June by the governance DAO Ethereum Layer 2 network Arbitrum ARB +0.057% to "catalyze gaming ecosystem growth" on the network has recently been met with scrutiny following an apparent lack of communication and several missed deadlines, prompting one DAO member to propose a recall of its funding. 

Arbitrum's Gaming Catalyst Program (GCP) was passed in June of this year after being unveiled in March, The Block previously reported , and aims to "immediately expand awareness and adoption of Arbitrum/Orbit/Stylus by builders and players in the Gaming community." The proposal allocated 225 million ARB tokens to the initiative over three years, a sum of tokens worth $215 million at the time, though its value has now fallen to about $122 million following ARB's decline in price. 

The GCP proposal, which passed with 76% of votes in favor , lays out several goals for the first four months of the program which, taking the proposal's passage as a start date, would correspond with the period between June 10 and Oct. 10 of this year. The assigned actions for this period include electing or confirming interim council members to permanent positions, issuing the first requests for proposals (RFPs) for infrastructure development, opening grant applications, establishing communication channels, and more. 

However, as noted by Arbitrum DAO member and DeFi founder Joseph Schiarizzi, who uses the handle @CupOJoseph, the GCP has seemingly missed several of the deadlines laid out in the original proposal. The GCP has apparently failed to create a website, issue RFPs, or consider grants, and it's unclear whether permanent council members have been elected. While the GCP has provided some updates in a thread on Arbitrum's DAO forum, the cadence of publicly published updates has seemingly fallen short of the proposal, which calls for updates every two weeks. 

The missed deadlines have prompted Schiarizzi to propose recalling a majority of the GCP's funding , 220 million ARB tokens worth about $118.6 million at current prices, from the GCP's multisig wallet to the Arbitrum DAO's treasury. "It is unconscionable to continue to allow a 3/5 multisig hold $120M in ARB when they have failed to meet their agreed on oversight obligations," Schiarizzi states in his proposal. 

When reached for an interview, Schiarizzi said he doesn't expect his proposal to pass, but that it has already had its intended effect of raising awareness about the GCP's missed deadlines. "The ideal solution isn't even that we pull all the funds back. The ideal solution is the DAO gets the transparency and the obligations that it set out at the beginning of GCP met." 

In a response post on X, Steven Goldfeder, the co-founder and CEO of Offchain Labs, Arbitrum's developer, countered that the biweekly calls have indeed occurred, and the complexity of setting up the GCP has led to reasonable delays. "It’s super complicated and won’t happen overnight — legal structure, oversight, hiring etc. And there are public biweekly status calls," Goldfeder wrote on X . 

Schiarizzi also noted that a quarterly transparency report promised by the GCP's original proposal has failed to materialize, though the proposal does state that the first report could take between 4 and 6 months following the proposal's passage.

"There is no transparency report because the program is being set up. The foundation is still holding all the funds for the DAO. Obviously there is no transparency report of data on GCP performance. They aren’t performing yet," wrote A.J. Warner, Offchain Labs' director of partnerships and strategy, in his own response post on X .

In an edit to his proposal, Schiarizzi said GCP council members told him that rather than counting the proposal's passage as its start date, the council members will be "...coming to the DAO in the coming days to formalize a start date for the program."

"I’m looking forward to it and will not pursue the [proposed funding recall] if we can quickly get back on track and post these updates publicly. Without any public updates posted in the update thread , I have no other official source of information to go on about how close they are to hitting the 4-month goals," Schiarizzi's post continues. 

Despite what Schiarizzi views as the GCP's failures so far, he reiterated that his intention isn't to cancel the program but rather to get it back on track.

"I didn't make this post originally because I want GCP to fail or I want to end it, I want it to be a success," Schiarizzi said. "When I started checking for updates, it was clear to me that we have to have this moment...of asking for more clarity and more commitment to the original things that everyone voted on."

Offchain Labs, along with Goldfeder and Warner, was unable to be immediately reached for comment by The Block.