Arbitrum’s Watchdog Committee, serving as a grant oversight body, has given three DeFi projects until a tentative Sept. 10 deadline to address high-severity misuse findings and repay capital deemed unresolved, or else face separate votes regarding their permanent exclusion from upcoming DAO initiatives.
Good Entry, Limitless, and APX Finance (formerly ApolloX) are named in the cases. Their cited figures add up to 457,553 ARB, but that total combines different findings rather than representing a single amount established as stolen, outstanding, or recoverable.
No response from any of the projects had appeared in the proposal thread as of Sept. 5. The schedule was described as tentative by the committee, which stated that a vote would follow only if a project’s explanation proved unsatisfactory and its respective funds were not returned within the one-week window. Approval for any ban has not been granted.
Regarding Good Entry, on-chain analysis revealed that 142,839 ARB was distributed to 1,032 ineligible users during and after the Short-Term Incentives Program, as stated by the committee. Self-farming by wallets linked to team addresses was also alleged, and clarification was reportedly refused by the project. Since Good Entry requested 200,000 ARB in its grant application, the watchdog figure accounts for a portion of the grant and details distributions rather than an unspent balance.
Limitless is accused by the watchdog of swapping 75,000 ARB into USDC and transferring those funds to Base, while team members could not be reached for clarification or recovery, matching the 75,000 ARB requested in the project’s LTIPP application.
The APX Finance finding cannot be cleanly reduced to a single repayment figure. An unspecified substantial portion left unutilized in treasury addresses, along with 239,714 ARB tied by the committee to overlapping issues, was noted. Late transfers to distributor contracts and alleged team-linked Sybil activity were also cited. Although APX requested 525,000 ARB in its application, the 239,714 ARB was not broken down by issue within the proposal.
What the Proposed Bans Could Enforce
A separate off-chain Snapshot vote will be faced by each project. Founders, current team members and affiliated contributors would be covered by a ban involving an operating project, according to the proposal, while only founders would be targeted if the project is no longer operating.
Social consensus will be sought by the votes, requiring no on-chain action. Covered projects or individuals would be rendered ineligible for upcoming programs administered by the Arbitrum DAO, according to the stated consequence. This transforms the measure into a governance-access sanction, meaning a wallet freeze or protocol deactivation will not be executed by it directly.
It was reported by the watchdog that, as of Sept. 2, the broader program had received 90 reports, recovered about 532,000 ARB and distributed about 268,000 ARB in reporter bounties. Whether any of the three projects answers before Sept. 10 constitutes the next signal, which will be followed by the committee’s decision on whether to proceed with its tentative Snapshot timetable.
