According to PANews, the governance token ARB of Ethereum's Layer 2 network, Arbitrum, has experienced a significant price drop of 71% over the past year, leading to a sharp decline in DAO voting participation. In response to this challenge, the Arbitrum community is contemplating reducing the minimum voting threshold for proposal approval from 5% to 4.5% to revitalize governance activity. This move comes amid a growing governance participation crisis, with data indicating a 50% decrease in Arbitrum's governance engagement over the past year, alongside an 87% drop in token price from its historical peak.
Community representatives have noted that when token holders face substantial losses, their motivation to engage in governance naturally diminishes. This situation not only affects routine decision-making but also risks preventing quality proposals from passing. Some representatives support lowering the threshold as a temporary measure, but the core issue remains the ecosystem's lack of tangible value to retain token holders.
