The Arbitrum Decentralized Autonomous Organization (DAO) has officially ratified a proposal aimed at augmenting the functionality of the ARB token and fortifying the security of governance processes.
The proposal, endorsed by 91% of more than 25,000 participants, will enable ARB token holders to stake and delegate their tokens in return for a liquid staked ARB token (stARB).
This new currency will serve as a representation of their ownership and allow for automatic reinvestment of future incentives, reinvestment options, and compatibility with decentralized finance applications.
The implementation will employ Tally’s liquid staking token system, which is based on Unistaker but tailored to suit Arbitrum’s governance architecture and fee collection method.
Subsequent excess fees from the sequencer will be utilized to incentivize ARB token holders who stake and actively delegate their tokens to “active delegates.” Active delegates will be determined based on their Karma Score, which is calculated by taking into account their Snapshot voting statistics, on-chain voting statistics, and forum involvement.
Advocates contend that the action is essential because the ARB coin has not performed well in terms of value accumulation, mostly because of problems with governance.
The proposal seeks to safeguard against potential governance attacks by restoring voting power to the DAO in the case that stARB is put into restaking, DeFi, or centralized exchange smart contracts that do not uphold a 1:1 delegation relationship.
The suggested modular architecture enables future enhancements and integration with other prospective Arbitrum staking systems, guaranteeing the staking mechanism can adapt to the protocol’s evolving requirements.
The projected expenses for the implementation amount to $200,000 in ARB tokens. This includes charges for smart contract development and integration with Tally.xyz, implementation of Karma score, security audits, and funding for working groups dedicated to staking rewards and delegation tactics.
