Arbitrum DAO Approves ARB Staking Proposal

Strong Community Support for Staking

The proposal underwent a “temperature check” vote, attracting over 25,000 participants. An overwhelming 91% of voters supported the initiative, highlighting the community’s strong desire to enhance the ARB token’s functionality and value proposition.

Key features of the proposal include:

• Liquid Staking Mechanism: ARB token holders can stake their tokens and receive a liquid staked token called stARB. This token will support auto-compounding rewards, restaking options, and compatibility with various decentralized finance (DeFi) applications.
• Incentivized Participation: The new system aims to boost participation in network governance and improve overall ecosystem security.

Governance and Active Delegation

The staking system will leverage Tally’s liquid staking token framework, tailored to Arbitrum’s governance structure and fee collection methods. A central component is the “Karma Score,” which aggregates data from Snapshot voting, on-chain activity, and forum engagement to determine “active delegates.”

This scoring system ensures that only those who actively contribute to governance are eligible for staking rewards. The Arbitrum DAO will maintain the ability to adjust scoring criteria and minimum requirements as the network evolves.

Addressing Security Concerns

Security is a critical focus for the Arbitrum network, especially given the substantial value in its treasury. With over 16 million ETH accumulated, the risk of governance attacks is significant. The new staking system includes safeguards to return voting power to the DAO if stARB tokens are deposited into systems lacking direct delegation relationships.

These measures are designed to ensure that network control remains with the Arbitrum community, minimizing manipulation risks by external entities. The DAO will also manage how reclaimed voting power is redistributed, further securing the governance process.

A Strategic Step for Arbitrum’s Future

The implementation of this staking proposal is estimated to cost $200,000 in ARB tokens, covering smart contract development, integration with Tally.xyz, and security audits. This initiative follows a recent decision by the Arbitrum Foundation to allocate $215 million over three years to support gaming projects on the network, underscoring a broader strategy for growth and innovation.

As Arbitrum solidifies its position as a leading Layer 2 solution on Ethereum, with over $2 billion in total value locked, the successful execution of this staking proposal is crucial. By enhancing the ARB token’s utility, encouraging governance participation, and addressing security concerns, Arbitrum is well-positioned for continued success in the competitive DeFi landscape.

This latest move by the Arbitrum DAO reflects a commitment to adapting and evolving in response to community needs, ensuring the network’s resilience and security as it grows.