The Arbitrum Foundation Bylaws

Source: https://docs.google.com/document/d/1YkV8IC-TXQFjPZn5_IJGb2wjlxNTjDZXK3cCzoF8hqM/edit

As adopted by the Foundation on [Date] 2023 

1. Mission. The mission of the Foundation is to foster, develop, authorize and/or govern ArbitrumDAO-Approved Chains. This includes but is not limited to: 

● Enabling the development of technical improvements and feature development ==to maintain  and increase Arbitrum capabilities to provide low cost, high throughput scaling solutions  with best-in-class user experience. 

● Fostering ecosystem growth through strategic grants to align with partner projects  including, but not limited to, infrastructure providers, application developers, artists,  creators, brand partnerships, creative studios, and strategic growth partners. 

● Organizing educational initiatives and both participating in and hosting events to increase  awareness of and promote Arbitrum technology and ecosystem. 

2. Defined Terms 

(a) “Administrative Budget Wallet” means the account that contains ArbitrumDAO approved Foundation assets, which will be utilized by the Foundation for purposes of  operational and administrative costs as well as administration of Special Grants.  

(b) “AIP” means an Arbitrum Improvement Proposal, which is a proposal put forth by  a Tokenholder to a vote in accordance with the AIP Process. 

(c) “AIP Process” means the rules and procedures of submitting and voting on AIPs  as described in the ArbitrumDAO Constitution, in particular “Section 2: DAO Proposals and  Voting Procedures”, as may be amended from time to time pursuant to an AIP. 

(d) “AIP Threshold” means that the Tokenholder putting forth the AIP must hold, or  have been delegated, at least 5,000,000 Votable Tokens, as defined in the ArbitrumDAO  Constitution, or as otherwise amended in the ArbitrumDAO Constitution. 

(e) “AIP-1” means the Arbitrum Improvement Proposal Framework available at this  link, including any amendments thereto. 

(f) “ArbitrumDAO” means, collectively, the decentralised community of individuals  that own a Token, as evidenced by the Ethereum blockchain and/or Arbitrum One chain.  

(g) “ArbitrumDAO Constitution” means the Constitution of the ArbitrumDAO as  incorporated into AIP-1 and available at this link, including any amendments thereto. 

(h) “ArbitrumDAO-Approved Chains” means the Arbitrum One and Arbitrum Nova  chains and any additional chains as authorized by the ArbitrumDAO. A “Governed Chain”  is an ArbitrumDAO-Approved Chain that is governed by the Token, whereas a “Non Governed Chain” is an ArbitrumDAO-Approved Chain that is not governed by the Token.

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(i) “Bylaws” means these governing bylaws of the Foundation as may be amended  from time to time. 

(j) “Cayman Islands Law” means the rules, regulations and laws of the Cayman  Islands from time to time. 

(k) “Data Availability Committee” is the committee described in the “Specifications”  section of AIP-1. 

(l) “DAO” means “decentralised autonomous organisation”. 

(m) “Emergency Meeting” has the meaning given in Section 3(b)(v) of these Bylaws. 

(n) “Foundation” means The Arbitrum Foundation, a Cayman Islands foundation  company. 

(o) “Foundation Articles” means the Memorandum and Articles of Association (as  may be amended from time to time). 

(p) “Foundation Director(s)” means the director(s) of the Foundation, which have  certain powers and duties pursuant to Cayman Islands Law and as further described in the  Foundation Articles. 

(q) “Foundation Supervisor” means the supervisor of the Foundation, which has  certain powers and duties pursuant to Cayman Islands Law and as further described in the  Foundation Articles. 

(r) “Governance Forum” means a governance forum page as designated by the  Foundation and ratified by the Tokenholders from time to time, which initially shall be  located at https://forum.arbitrum.foundation/.  

(s) “Security Council” is the council formed in accordance with AIP-1 and as further  described in Section 4. 

(t) “Special Grant” is a grant by the Foundation to grant applicants, which is not  required to undergo the full AIP Process. 

(u) “Token” means the governing token of the ArbitrumDAO, known as $ARB,  represented on the Ethereum blockchain and/or the Arbitrum One chain.  

(v) “Tokenholder” means any holder of the Token. 

3. Voting Matters.  

(a) Pursuant to AIP-1, the ArbitrumDAO Constitution, the Foundation Articles, and  these Bylaws, the Tokenholders may approve Constitutional AIPs and Non-Constitutional  AIPs (each as defined in AIP-1 and the ArbitrumDAO Constitution) in order to:

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(i) add, remove or expand the whitelist of permissioned validators on  Arbitrum One, Arbitrum Nova and/or any other Governed Chain, or remove the  whitelist altogether; 

(ii) appoint and remove members of the Data Availability Committee on  Arbitrum Nova or any other Governed Chain that employs a Data Availability  Committee; 

(iii) appoint and remove members of the Security Council in accordance with  the ArbitrumDAO Constitution; 

(iv) govern the Sequencer on each Governed Chain (if applicable), including  expanding the number of Sequencers; 

(v) pursuant to the Foundation Articles, elect individuals or organisations into  the role of director and/or supervisor of the Foundation; 

(vi) pursuant to the Foundation Articles, remove individuals or organisations  from the role of director and/or supervisor of the Foundation (provided that the  Foundation may not, at any time, be left with no directors and/or no supervisor); 

(vii) provide consent to any proposed changes to these Bylaws which amend  or remove the rights of the Tokenholders under these Bylaws; 

(viii) provide consent to any proposed changes to the Foundation’s Articles  which amend or remove the rights of the Tokenholders under the Foundation’s  Articles; 

(ix) approve the authorization of a Non-Governed Chain; and 

(x) approve any other action in accordance with AIP-1, the ArbitrumDAO Constitution, the Foundation Articles and these Bylaws. 

(b) The Foundation Director(s) shall engage in any activity which, in their reasonable  discretion, does not contradict the terms set forth in any AIP approved by Tokenholders,  the ArbitrumDAO Constitution, these Bylaws, or the Foundation Articles, including but not  limited to the following actions: 

(i) approve transactions from the Administrative Budget Wallet; 

(ii) coordinate emergency operations with the Security Council on behalf of  the ArbitrumDAO or the Foundation; 

(iii) pursuant to AIP-1, create a Special Grants application process and criteria  and make Special Grants to successful applicants; 

(iv) make changes to these Bylaws if the Foundation Directors believe such  changes would improve the Foundation Directors’ ability to fulfill their obligations  (the “Amendment Authority”). Directors agree in good faith to exercise such  Amendment Authority pursuant to the AIP Process unless such Amendment 

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Authority must be exercised at an Emergency Meeting as described in Section  3(b)(v) below; and 

(v) call and hold emergency meetings (“Emergency Meetings”) to enable the  Foundation Directors and the Security Council to rapidly respond to an imminent  security threat to the ArbitrumDAO, any protocol utilizing the Token, the  Tokenholders, or the Foundation, and the same rules that apply to Foundation  Directors meeting in accordance with the Foundation Articles will apply to  Emergency Meetings, except that: 

(A) an Emergency Meeting may be convened by the Security Council  without prior notice to the Foundation Directors; 

(B) there is no quorum requirement for an Emergency Meeting; and 

(C) the Foundation Directors will not publish minutes of an Emergency  Meeting until the underlying security threat has been remedied or judged  

to no longer be a threat, in the discretion of the Foundation Directors and  the Security Council. 

4. Security Council 

(a) The provisions set out in the ArbitrumDAO Constitution, in particular “Section 3:  The Security Council” and “Section 4: Security Council Elections”, shall apply. 

(b) The Security Council is a 12-member committee which is delegated the authority  to engage in Emergency Actions and Non-Emergency Actions as described in the  ArbitrumDAO Constitution, and is otherwise tasked with ensuring that AIPs are in  compliance with the ArbitrumDAO Constitution. 

5. Proposal Phases, Requirements and Structure 

(a) The provisions set out in ”AIP Guidelines and Process Breakdown", "Introduction  to Voting" and "Arbitrum Voting Protocol Procedure" of AIP-1 shall apply. 

(b) Foundation Director Rejection: If, following the approval of an AIP by the  ArbitrumDAO, a majority of the Foundation Director(s) acting in the best interests of the  Foundation Company reasonably determine that such AIP, if implemented, would: 

(A) compromise the Foundation Director(s)’ fiduciary duties as they  are owed to the Foundation; 

(B) be in violation of these Bylaws, the Foundation Articles, the  ArbitrumDAO Constitution, the AIP Process, any statutory requirements of  Cayman Islands Laws or the laws or regulations of any other applicable  jurisdiction; 

(C) cause the Foundation to be in breach of any contracts,  agreements or any other arrangements; and/or

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(D) be against the best interests of the Foundation, 

such Foundation Director(s) may direct the Security Council or take such other  steps as are required to reject such AIP. 

6. Proposals regarding Foundation Directors 

(a) As set forth in Section 3(a)(vi) and (vii) above, Foundation Directors may be  appointed or removed from time to time in accordance with the AIP Process, or as  otherwise set forth in the Foundation Articles, provided that the Foundation must always  have one director. For the avoidance of doubt, the Tokenholders may elect or remove the  Foundation Directors, or expand or reduce the number of Foundation Directors, pursuant  to their approval of a Non-Constitutional AIP. 

7. Relationship between the Foundation and the Tokenholders 

(a) The Tokenholders are represented by the Foundation, which represents the  Tokenholders' interests in connection with contractual and legal processes, including  regulatory compliance and those other matters set forth in the Foundation Articles. 

(b) The Foundation has engaged with certain third parties to provide services as the  Foundation Director(s) and Foundation Supervisor, as required by Cayman Islands Law.  In accordance with the terms of the Foundation Articles and these Bylaws, and subject to  Cayman Islands Law, the Foundation Director(s) and Foundation Supervisor are required  to act at the direction of the Tokenholders in respect of certain matters. 

(c) The Tokenholders have the authority to make certain decisions in relation to the  Foundation as set forth in these Bylaws and the Foundation Articles. In the event there is  ever a conflict between the decisions of the Foundation and the Tokenholders, the  decisions of the Tokenholders will prevail, unless a different outcome is required under  Cayman Islands Law. 

(d) The Tokenholders shall ensure that the Foundation has sufficient authority and  resources, including funding, to execute upon the Foundation’s mandate, meet the  Foundation’s obligations under applicable law, and satisfy the Foundation’s contractual  obligations entered into in accordance with the Foundation Articles or these Bylaws. 

(e) The Foundation’s Directors are authorised to take any actions reasonably  necessary on behalf of the Foundation to give effect to a vote of the Tokenholders including  passing any director resolutions to memorialise such vote. 

(f) To the extent there is ever a conflict between the provisions of the Bylaws and the  Foundation Articles, the Foundation Articles will prevail. 

(g) Foundation Directors are not fiduciaries for the Tokenholders. 

8. Dispute Resolution 

(a) Should a controversy, dispute or claim arise out of or in relation to these Bylaws  (“Dispute”), the Foundation, the Directors, the Supervisor or the Tokenholders (as 

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appropriate) must give 30 days’ notice of such Dispute to the relevant party/ies (the “Notice  of Dispute”). Should the Dispute not be resolved at the expiration of 30 days after service  of the Notice of Dispute, the relevant party may commence arbitration proceedings in  accordance with (b) below. In any dispute involving the actions of the Foundation Directors  or the Supervisor, the Foundation, and not the Foundation Directors or Supervisor, shall  be party to the arbitration proceedings. 

(b) Should the Dispute remain at the expiration of 30 days after service of the Notice  of Dispute, the Dispute shall be settled by arbitration administered by the International  Centre for Dispute Resolution in accordance with its International Arbitration Rules (the  “Rules”). The arbitration shall be seated in George Town, Grand Cayman and governed  by Cayman Islands law. The language of the arbitration shall be English. The arbitration  shall be determined by a sole arbitrator to be appointed in accordance with the Rules. Any  award or decision made by the arbitrator shall be in writing and shall be final and binding  on the parties without any right of appeal, and judgment upon any award thus obtained  may be entered in or enforced by any court having jurisdiction thereof. No action at law or  in equity based upon any claim arising out of or related to these Bylaws shall be instituted  in any court of any jurisdiction.**