As a seasoned crypto investor with years of experience under my belt, I must admit that the recent approval of the Arbitrum DAO proposal to introduce liquid staking for ARB tokens has me pretty excited. This is not just another run-of-the-mill update; it’s a game-changer that could significantly boost the utility and security of the network.
The Arbitrum DAO supported a plan to make ARB tokens more useful and secure governance. This idea received massive approval from over 25,000 participants in an online vote.
Introduction of Liquid Staking
Approving the proposal opens up a novel staking system for ARB token owners, whereby users can deposit their ARB tokens to receive liquid-staked tokens known as stARB. These staked tokens serve as a representation of the user’s assets and come with advantages such as automatic reward accumulation and the ability to reinvest. Additionally, stARB will be compatible with various decentralized finance (DeFi) platforms, broadening its capabilities within the ecosystem.
Arbitrum intends to develop a staking system using Tally’s staking token model, which is built upon the Unistaker framework. This customized system will be designed to complement Arbitrum’s distinct governance and fee systems. The plan also takes into account the potential impact of fee distribution on the ARB token.
The extra income is made up of funds generated by Maximal Extractable Value (MEV) and sequencer fees. From now on, any extra sequencer fee surpluses will be distributed as rewards to ARB token holders who pledge and assign their tokens to “active delegates”. These active delegates will be selected based on a Karma Score, which considers factors such as Snapshot voting results, on-chain activity, and forum involvement.
Enhancing Utility and Security
The plan aims to address the scarcity of active ARB token usage and decreasing interest in voting within our community. Currently, fewer than 1% of these tokens are being used actively, and voter participation has been on a downward trend since the DAO was established. To increase community engagement and enhance network security, we’re considering introducing a staking system.
Furthermore, the plan aims to address potential governance issues as well. With over 16 million ETH amassed in excess fees from Arbitrum One and Nova, the likelihood of governance attacks has increased. To mitigate these risks, a staking system has been established. If stARB is inserted into contracts without a corresponding 1:1 delegation relationship, the associated voting power will be returned to the DAO. This mechanism allows the DAO to maintain control over how voting power is allocated.
As a seasoned software developer with extensive experience in blockchain technology, I wholeheartedly endorse this proposal that adopts a modular strategy for future upgrades and integrations with additional staking systems. In my career, I have encountered numerous instances where a modular approach has proven to be an effective solution for scalability and flexibility. This plan is no exception, as it allows for seamless integration of new features and improvements in the future, ensuring that the platform remains competitive and relevant.
Next Steps and Broader Impact
As a crypto investor, I’m excited about this staking initiative that could significantly contribute to the network’s expansion and enhance its robustness. If approved, this proposal is set to progress to an on-chain Tally vote, with the implementation scheduled to start in October, assuming it receives a green light.
In early March, the Arbitrum Foundation gained over 75% approval for a $215 million investment fund aimed at boosting game development within the Arbitrum network. This move reaffirms the Decentralized Autonomous Organization’s (DAO) dedication to expanding and strengthening its ecosystem.
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2024-08-16 11:55