Arbitrum DAO Watchdog Proposes Permanent Bans for Three Grant Recipients
Proposal to Ban Three Projects
The Arbitrum Watchdog Committee has filed a proposal asking ARB token holders to permanently bar three DeFi projects—Good Entry, Limitless and APX Finance—and their founders from any future Arbitrum DAO programs. The proposal was posted on the Arbitrum governance forum on September 3 and could lead to Snapshot votes as early as September 10.
Key Points
- Good Entry: 142,839 ARB flagged for grant misuse.
- Limitless: 75,000 ARB flagged for moving funds to Base chain.
- APX Finance: 239,714 ARB flagged for unspent funds and sybil activity.
- Total flagged amount: 457,553 ARB (≈ $76,000 at $0.166 per ARB).
- The Watchdog Program has recovered about 532,000 ARB and paid 268,000 ARB in reporter bounties.
- Projects have until September 10 to respond; none have replied.
Watchdog Program Background
The Watchdog Committee, composed of Entropy Advisors, MinistroDolar, the Arbitrum Foundation and OpCo, runs a grant‑misuse bounty program. It classifies cases as “high‑severity” when there is large‑scale, deliberate misuse such as fabricated deliverables or theft. As of September 2, the program had received 90 reports, recovered roughly 532,000 ARB for the DAO, and distributed about 268,000 ARB to reporters.
Project‑Specific Findings
Good Entry received 200,000 ARB in the Short‑Term Incentive Program. On‑chain analysis showed 142,839 ARB went to 1,032 ineligible users and involved self‑farming. The team did not respond to the committee’s request for clarification. The project stopped development in July 2024 and now holds about $39,000 in value.
Limitless was allocated 75,000 ARB in the LTIPP program. The committee says the team swapped the entire amount into USDC and bridged it to the Base chain, removing funds from the Arbitrum ecosystem. The project is marked deprecated and has roughly $2,300 left across Arbitrum and Base. The team could not be contacted.
APX Finance received 525,000 ARB in LTIPP. The committee identified 239,714 ARB misused through unspent treasury funds, late distributions, and a sybil cluster linked to team addresses. APX merged with Astherus in December 2024; Astherus rebranded to Aster in March 2025. Aster now holds $814 million in total value locked, with about $51 million on Arbitrum.
Voting Process and Timeline
The DAO approved the Watchdog Program in an on‑chain vote (May 11‑26 2025) with 189.97 million ARB in favor. If the three projects do not provide satisfactory explanations by September 10, separate Snapshot votes will be held—one per project—to decide on permanent bans. The votes are final and do not require any on‑chain action.
Unresolved Issues
None of the three projects have replied to the forum thread, leaving the committee without clarification. The ban would apply to founders of the projects that have already ceased operations.
Why It Matters
Permanent bans would create a DAO‑level blacklist that prevents the identified founders from participating in any future Arbitrum DAO incentives, aiming to protect the ecosystem from repeated grant misuse.
