The Arbitrum DAO has approved a proposal designed to increase the utility of the ARB token and enhance governance security. The proposal, which received 91% approval from over 25,000 participants, demonstrates strong backing from the Arbitrum community.
Under the new plan, ARB token holders will have the option to stake and delegate their tokens in exchange for a liquid staked ARB token, known as stARB. This stARB token will represent their stake and offer features such as auto-compounding rewards, restaking opportunities, and compatibility with various decentralised finance (DeFi) applications.
The staking mechanism will be implemented using Tally’s liquid staking token system, customised to fit Arbitrum’s governance framework. Future surplus sequencer fees will be channelled to ARB token holders who stake and actively delegate their tokens to designated "active delegates."
Active delegates will be selected based on a Karma Score, which aggregates Snapshot voting stats, on-chain voting data, and forum activity. The Arbitrum DAO will have the authority to adjust the Karma Score formula and set the minimum score required for delegates to earn staking rewards.
Supporters of the proposal argue that it addresses key issues related to the ARB token’s underutilisation and the need for stronger governance. Currently, less than 1% of ARB tokens are actively engaged in the on-chain ecosystem, and voter participation has been declining since the DAO’s formation.
The new staking mechanism also seeks to mitigate the risk of governance attacks, particularly given the significant amount of surplus fees—over 16 million ETH—held by Arbitrum One and Nova. By reclaiming voting power when stARB is deposited into certain smart contracts, the DAO aims to prevent potential attacks and ensure that voting power remains aligned with the community's interests.
The proposal includes a modular design that allows for future upgrades and integration with other staking systems. This flexibility ensures that the staking mechanism can evolve to meet the protocol’s needs.
The estimated cost for implementing the proposal is $200,000 in ARB tokens. This budget will cover smart contract development, integration with Tally.xyz, Karma Score implementation, security audits, and the funding of working groups dedicated to staking rewards and delegation strategies.
This governance update marks a crucial step for Arbitrum in addressing challenges related to token utility and ecosystem participation. By incentivising staking and active delegation, the DAO hopes to foster greater engagement, strengthen security, and better align token holder interests with the protocol’s long-term success.
Cryptocurrency market sees mainstream adoption surge amid Bitcoin halving and BTC ETFs buzz. Whales diversify into promising altcoins like Toncoin, Cardano, Arbitrum, and Mollars, anticipating significant gains.
EdmundWhile recovery might be close, there is still long way to go
ZoeyThe specific allotment will be determined by the DAO through snapshot voting, subject to approval by counting votes. The proposed plan aims to distribute ARB to protocols within a 12-week timeframe, with any remaining funds slated to be returned to the DAO.
AlexAs the market awaits ARB's price action, the forecasted breakout above $2 remains a focal point for investors in 2024, potentially reshaping ARB's trajectory in the first half of the year.
Xu LinArbitrum's network faced significant downtime due to sequencer and feed issues amidst increased traffic, affecting the ARB token's value.
KikyoKyberNetwork faces renewed scrutiny as an exploiter-linked address transfers $2.06M on Arbitrum. Past interactions raise concerns, highlighting vulnerabilities in DeFi security.
Cheng YuanCheng YuanVitalik Buterin’s latest blog post suggests further improvements to Ethereum's proof-of-stake system, focusing on lowering staking barriers and speeding up transaction finality. However, these changes come with new challenges for the network.
SanyaCryptocurrency, Arbitrum, how safe is USDT on ARB? Golden Finance, is there any problem with frequently using USDT and USDC on ARB?
JinseFinanceStakeStone, a leader in Omnichain liquidity, offers a decentralized Liquid Staking Token (LST) protocol, aiming to revolutionize staking with innovative solutions.
BrianEthereum’s eagerly anticipated Shanghai upgrade, which will enable the withdrawal of staked ETH, will likely occur in the first two weeks of April.
decryptBlish believes the biggest challenge would emerge if the SEC decides that no U.S. citizen should interact with crypto staking protocols.
cryptopotatoThe ApeCoin stakers will start accruing their staking rewards from Dec. 12.
BeincryptoThe Ethereum network has transitioned to proof-of-stake. Ethereum staking is a way ETH investors can earn a reward by locking up their coins.
CoindeskStakers have been and will be natural sellers in futures and perpetual futures and the hedging activity will increase as staking yields rise.
Coindesk
Coinlive The U.K. HM Revenue & Customs (HMRC) agency opened a consultation on the state of crypto taxation, specifically for decentralized ...
Bitcoinist
