Arbitrum Proposes Permanent Ban for Three Projects in DAO Accountability Test

TL;DR

• The Arbitrum Watchdog Committee proposed the permanent exclusion of Good Entry, Limitless, and APX Finance from future DAO programs.
• The three projects have until September 10 to respond; if they do not, separate votes will be launched on Snapshot for each case.
• The Watchdog program has recovered approximately 532,000 ARB and distributed around 268,000 ARB in rewards since its creation.

The Arbitrum Watchdog Committee proposed the permanent exclusion of three projects —Good Entry, Limitless, and APX Finance, formerly known as ApolloX— from all future programs of the ArbitrumDAO.

The measure has not been approved: the projects have until September 10 to present their responses in the governance thread. If the committee finds the explanations insufficient and the funds have not been returned, it expects to publish three separate votes on Snapshot, one for each case.

The proposal does not contemplate any on-chain action. It does not freeze wallets, close smart contracts, or prevent any of the parties from interacting with the public network. Its practical effect is limited to blocking the implicated parties’ access to subsidies, incentives, and other DAO-funded opportunities in the future.

The Arbitrum committee created the Watchdog program to incentivize the reporting of fund misuse and facilitate its recovery. Its framework classifies deliberate and large-scale misuse as high severity, including falsified deliverables or direct misappropriation of funds. As of September 2, the program had received 90 reports, recovered approximately 532,000 ARB, and distributed around 268,000 ARB in rewards to whistleblowers.

The three investigations describe distinct forms of alleged misuse. In Good Entry’s case, the committee notes that 142,839 ARB would have been distributed to 1,032 ineligible users, with indications of incentive farming linked to the team itself. Limitless allegedly converted 75,000 ARB into USDC and transferred the funds to Base. APX Finance was flagged for 239,714 ARB associated with unreturned funds, delayed distributions, and alleged Sybil activity linked to the team.

Given that Good Entry declared it had ceased operations and Limitless also appears to be inactive, the committee proposes extending a potential ban to founders, current team members, and affiliated contributors. The goal is to prevent a team from shutting down one brand, opening another, and returning to the same funding ecosystem.

However, this places the burden of proof on identity attribution: token holders will need to evaluate what evidence concretely links each wallet or contributor to those who controlled the decisions over the funds.

The outcome of the process will depend on the projects’ responses, any eventual reimbursements, and the strength of the affiliation evidence presented by the committee. If the votes take place, each Snapshot will serve as the final social consensus decision of the Arbitrum DAO.