Three DeFi projects face possible exclusion from future Arbitrum DAO programs

Arbitrum's Watchdog Committee has issued a tentative September 10, 2026 deadline for DeFi projects Good Entry, Limitless, and APX Finance to address high-severity grant misuse findings involving 457,553 ARB. If the projects fail to resolve the issues or return funds, they face separate off-chain Snapshot votes on permanent exclusion from future Arbitrum DAO programs. The proposed bans would act as governance-access sanctions rather than executing on-chain wallet freezes.

Arbitrum Watchdog Committee exclusion proceedings

• ▪As of September 5, 2026, none of the three accused DeFi projects had posted a response in the Arbitrum governance proposal thread.
• ▪Arbitrum's Watchdog Committee gave Good Entry, Limitless, and APX Finance until a tentative September 10, 2026 deadline to address high-severity grant misuse findings.
• ▪The Arbitrum Watchdog Committee cited a combined total of 457,553 ARB across the findings for Good Entry, Limitless, and APX Finance.

Good Entry misuse findings

• ▪The Arbitrum Watchdog Committee alleged that Good Entry distributed 142,839 ARB to 1,032 ineligible users during and after the Short-Term Incentives Program.
• ▪The Arbitrum Watchdog Committee accused Good Entry of self-farming via wallets connected to team addresses and stated the project refused to clarify.

Limitless APX Finance allegations

• ▪The Arbitrum Watchdog Committee accused Limitless of swapping 75,000 ARB into USDC and transferring those funds to the Base network.
• ▪The Arbitrum Watchdog Committee tied 239,714 ARB allocated to APX Finance to issues including unutilized treasury funds, late distributor contract transfers, and team-linked Sybil activity.

Grant fund recovery mechanisms

• ▪The Arbitrum Watchdog Committee stated that exclusion votes against Good Entry, Limitless, and APX Finance would only proceed if their explanations are unsatisfactory and funds are not returned.
• ▪The proposed bans on Good Entry, Limitless, and APX Finance function as governance-access sanctions and would not execute wallet freezes or disable protocols.

Off-chain Snapshot ban votes

• ▪The proposed bans against Good Entry, Limitless, and APX Finance would be decided through separate off-chain Snapshot votes to seek social consensus.
• ▪If approved, the Arbitrum DAO bans would cover founders, current team members, and affiliated contributors for operating projects, and only founders for non-operating projects.

DAO governance oversight program

• ▪As of September 2, 2026, the Arbitrum grant oversight program had received 90 reports, recovered approximately 532,000 ARB, and distributed 268,000 ARB in reporter bounties.
• ▪Good Entry, Limitless, and APX Finance had originally requested 200,000 ARB, 75,000 ARB, and 525,000 ARB respectively in their original Arbitrum grant applications.

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