Contributor to the governance of the Layer 2 network Arbitrum (ARB), Frisson, initiated a new proposal, requesting a vote from the Arbitrum community.
The proposal offers unlocking the ARB utility and improving the governance and security of the Arbitrum protocol by unveiling the ARB staking without enabling fee allocation to holders of the funds. Via the ARB staking, those holders who delegate their assets to active governance participants will have a chance to capture value.
Additionally, it introduces stARB through the Tally Protocol, which allows any upcoming incentives to automatically compound, be staked or restaked, and remain compatible with decentralized finance (DeFi) applications.
Currently, ARB is facing challenges in accruing value and functioning effectively as a governance mechanism. At the same time, the Arbitrum DAO treasury has amassed more than 16 million ETH in surplus fees from Arbitrum One and Nova, making it increasingly appealing for bad actors to attempt a DAO treasury exploit.
ARB staking introduces utility and strengthens governance by establishing a system that streams the rewards from DAO-generated sources, such as sequencer fees, maximal extractable value (MEV) fees, validator fees, token inflation, as well as treasury diversification, to token holders who delegate to governance participants. This mechanism also facilitates ARB to be utilized in restaking and DeFi by giving back to the DAO the voting power, which was previously locked in contracts.
Upon Passing Temperature Check, Proposal Is Set To Be Funded With $200,000 USD In ARB
If the proposal successfully completes the temperature check, an on-chain proposal will be submitted, requesting $200,000 USD in ARB to cover development costs. This funding will support the creation of ARB staking smart contracts, the integration of ARB staking into Tally.xyz, the incorporation of Karma into ARB staking, and the audit of the ARB staking smart contracts. The voting is currently ongoing and is set to finalize on August 16th.
Arbitrum represents a Layer 2 scaling solution for Ethereum created to improve scalability and efficiency. By using rollups, it increases transaction throughput and reduces costs while maintaining Ethereum’s security.
The ARB token represents an ERC-20 governance token that enables users to take part in the Arbitrum DAO’s on-chain governance. It is minted through a smart contract on Arbitrum One, a Layer 2 blockchain utilizing Arbitrum’s rollup technology.
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