Arbitrum DAO Enables Staking for ARB Tokens
The decentralized autonomous organization (DAO) of Arbitrum, an Ethereum-based layer-2 scaling solution, has approved a proposal that allows users to stake the network’s native token, ARB, in exchange for rewards. The voting process took place from October 30 to November 6, with 66% of ARB holders voting in favor of the proposal.
The ARB Staking Proposal
Arbitrum DAO currently holds a significant amount of ARB tokens in its treasury, and it aims to share this growth with token holders. The proposal suggests creating a staking mechanism that distributes ARB to those who lock their tokens. By incentivizing long-term token holders, the DAO hopes to increase interest in the Arbitrum ecosystem and lay the foundation for future token utility proposals.
The Arbitrum Coalition, comprising Blockworks Research, Gauntlet, and Trail of Bits, will monitor the effects of the staking mechanism over a 12-month trial period. They will provide quarterly updates and qualitative reporting to the community and recommend a sustainable incentive model for the ARB token.
A 12-Month Trial Period
During the trial period, ARB holders can lock their tokens for up to 365 days, adjust their lock times, and claim rewards based on their weights. The weight is determined by the duration of token lock-up.
The proposal included different options for funding the staking mechanism, with the option of allocating 1% of the total ARB supply receiving the most votes. Before staking begins, another proposal will determine the service provider, associated contracts, and an auditor for implementation. Following community review, these contracts will be deployed to Arbitrum.
Hot Take: Encouraging Token Locking with Staking Rewards
The Arbitrum DAO’s decision to enable staking for ARB tokens is a significant development for the platform. By incentivizing long-term token holders, the DAO aims to foster community engagement and attract more users to the ecosystem. The 12-month trial period will provide valuable insights into the effects of the staking mechanism and help determine a sustainable incentive model. As the Ethereum network continues to explore layer-2 scaling solutions, initiatives like this can contribute to the growth and development of the ecosystem.
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