Arbitrum DAO Greenlights Token Staking
The Arbitrum community has given its approval for an initial governance vote on a proposal that seeks ARB token holders to lock their holdings in return for yield. This initiative is anticipated to receive backing from the Arbitrum treasury and be distributed over a 12-month period via a smart contract, as outlined in the PlutusDAO proposal.
The initial phase of the governance vote, which was granted the green light today, initially introduced a structured approach to token distribution. It provided choices to allocate either 1% (equivalent to 100 million tokens), 1.5% (150 million tokens), or 1.75% (175 million tokens) of the total ARB supply of 10 billion as rewards for staking.
In a temperature check vote conducted on SnapShot, the majority, constituting over 66% of the DAO members, voted in favor of the lowest tier, which involved allocating 1% (100 million tokens) for staking. A minority, comprising 33%, opposed the vote, underscoring a discord within the community regarding the utilization of treasury funds for staking incentives.
Following the completion of the temperature check vote, the Arbitrum DAO is poised to conduct a more comprehensive review. In the upcoming stage, the DAO will assess a subsequent AIP proposal that delves into the specifics of the staking implementation and awaits approval. Additionally, a final consensus from the community via the Tally platform, which serves as an on-chain DAO management tool, will be necessary to officially grant stakers a token yield from the treasury. It's important to note that this yield will have its own distinct nature, separate from other mechanisms where tokens are staked for network security or revenue distribution.
The anticipated annualized percentage yield ranges between 7.84% and 78.43% when 100 million tokens are utilized, with the actual yield depending on the proportion of the ARB supply that is staked.
Reference:
Arbitrum community approves initial vote on proposal to activate token staking (no date) The Block. Available at: https://www.theblock.co/post/261628/arbitrum-dao-approves-proposal-to-activate-token-staking?(Accessed: 7 November 2023).