The Arbitrum community will vote to implement ARB staking to unlock wider token utility and align governance. The security mechanism of the Ethereum layer 2 network is also tipped to improve if staking is implemented. Users have lauded the move across social media spaces highlighting potential impacts.

Arbitrum To Implement ARB Staking

Arbitrum delegate and the Head of Marketing at Tally, Frisson has proposed a vote to implement ARB staking on the network. This would improve governance, token utility, and security in the entire ecosystem without distributing fees to token holders at the moment. Per the release, it will implement a stARB, a liquid-staked ARB token with governance participants capturing value.

“The proposal will also implement a liquid staked ARB token (stARB) via the Tally Protocol that enables any future rewards to auto-compound, is (re)stakeable, and is compatible with DeFi. Separately, we will work with the Arbitrum DAO to decide whether and how to fund rewards and split rewards between token holders and delegates.”

The proposal is borne out of the fact that ARB is struggling to notch values because governance remains the only source of fundamental demand for the token. At the moment, restaking ARB or its DeFi use isn’t compatible with governance with only 10% of the circulating support utilized for that purpose. This proposal will lead to rewards from MEV fees, sequencer fees, and validator fees and make retaking usable as well as in DeFi. 

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Contributor Warns of Potential Vulnerability 

While the potential gains for the token have dominated discussions, Frisson highlighted the reason for a potential governance attack. The Arbitrum DAO Treasury has amassed 16 million $ETH in fees making it an economically attractive target. This increase takes place without relative action in ARB for voting power to defend against such attacks. The proposal is expected to cost $200,000 in ARB to cover development and other categories. It will include staking contracts, the network’s fee mechanism, integration of Karma Scores among others.

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Filed under: News - @ August 9, 2024 2:20 pm