We’ve seen proposals like this before and back then were very controversial: Refund dYdX user funds lost from high price impact out of ProtoRev profits
However I think this case is quite simple and resolving it doesn’t seem to have too much overhead. It seems like edge-cases like these will be covered in front-ends going forward and Osmosis is still keeping a very nice ~200k USD bounty for catching the initial arb.
As long as we dont see strong aversion from token holders we will vote yes as we think it is a fair proposal and solution. Governance exists for a reason, this is a fine use of it.
Best,
Ertemann
Lavender.Five Nodes