Arbitrum Community To Vote On Key Development, Here’s More

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As a seasoned analyst with years of experience in the dynamic world of blockchain and cryptocurrencies, I find the proposed implementation of ARB staking by Arbitrum to be a strategic move towards enhancing token utility, governance, and security. The liquid-staked ARB token (stARB) via Tally Protocol seems like an innovative approach to leverage the potential of DeFi and auto-compounding rewards.

In a community vote, Arbitrum plans to introduce ARB staking for increased token functionality and better governance alignment. This move could also enhance the security mechanisms within their Ethereum layer 2 network. The decision has been positively received by users on various social platforms, who have discussed its potential benefits.

Arbitrum To Implement ARB Staking

Frisson, who is both an Arbitrum representative and Tally’s Marketing Director, has suggested a vote for integrating ARB staking within the network. This change could enhance governance, token usefulness, and security across the entire ecosystem. At this time, it doesn’t plan to share fees with token holders. Instead, they will introduce a new token called stARB, which is a liquid-staked version of ARB. Governance participants can benefit from the value generated by this token.

“Our proposal includes introducing a liquid-staked ARB token (stARB) using Tally Protocol. This token allows for automated compounding of future rewards, can be restaked, and is designed to integrate with DeFi. Additionally, we will collaborate with the Arbitrum DAO to determine if rewards should be funded, how they’ll be distributed, and whether they’ll be shared among token holders and delegates.”

The idea arises due to ARB’s difficulty in achieving significant values as it relies solely on governance for its fundamental demand. At present, staking ARB or using it within DeFi doesn’t align with governance, with just 10% of the circulating supply being used for this purpose. This proposal aims to enable rewards from MEV fees, sequencer fees, and validator fees, making staking more accessible and compatible within DeFi as well.

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While the potential gains for the token have dominated discussions, Frisson highlighted the reason for a potential governance attack. The Arbitrum DAO Treasury has amassed 16 million $ETH in fees making it an economically attractive target. This increase takes place without relative action in ARB for voting power to defend against such attacks. The proposal is expected to cost $200,000 in ARB to cover development and other categories. It will include staking contracts, the network’s fee mechanism, integration of Karma Scores among others.

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2024-08-09 17:24