Arbitrum DAO Members Push to Wind Down Underperforming Gaming Fund
A proposal to recover unused funds from Arbitrum's Gaming Catalyst Program (GCP) has gained traction within the Arbitrum decentralized autonomous organization. On March 24, DAO member Nathan van der Heyden submitted the proposal, citing the program's lack of progress and transparency.
The GCP was launched in 2024 with approximately 225 million ARB tokens, valued at $468 million at that time. Its goal was to position Arbitrum as a leading platform for onchain gaming development by investing in promising studios and games.
Van der Heyden stated that the program was approved when projections were "exceptionally optimistic" but has "proved unsustainable." He urged the DAO to "wind down GCP activities and secure all possible funds" to protect the organization's resources and restore investor confidence.
Community sentiment appears mixed on the proposal. While many members support an immediate recovery of funds, others advocate for a more measured approach. One member suggested phased clawbacks rather than immediately reclaiming all funding, along with more flexible reporting standards.
The proposal comes as Arbitrum's ARB token has dropped 81% since the GCP's launch. Currently trading at $0.38, the tokens allocated to the program are worth significantly less than their original value. By June 2024, the program's allocation had already decreased to approximately $215 million.
The situation reflects a broader decline in Web3 gaming investments. Toshiyuki Otsuka, founder of GameFi platform Snpit, told Cointelegraph that market volatility and an oversaturation of low-quality projects have led investors to take a more cautious approach to the sector.
This trend extends beyond Arbitrum. On March 14, ZKsync ended its liquidity rewards program, citing current market conditions as a factor in the decision.
