Arbitrum Co-Founder and Offchain Labs CEO Stephen Goldfeder said that communication in the lead-up to a failed proposal earlier this month that aimed to return 700 million ARB governance tokens had been less than ideal.

"There was an unfortunate miscommunication, and it was definitely a mistake," he said "If you're looking back in hindsight, it's obvious, but it wasn't obvious at the time."

The Ethereum Layer 2 scaling project was forced to backtrack on a proposal in early April after token holders who control the protocol's decentralized autonomous organization staged a revolt by voting to stop the planned transfer of ARB tokens worth about $1 billion meant to capitalize the Arbitrum Foundation.