Arbitrum DAO Greenlights Proposal for Token Staking Activation

Arbitrum ARB

The Arbitrum DAO has given the green light to a proposal that allows ARB token holders to participate in token staking, enabling them to earn a yield in return. This yield will be sustained by the treasury and will be disbursed over a span of 12 months through a smart contract.

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The decentralized autonomous organization of Arbitrum has granted approval to a governance proposal that allows holders of the ARB token to engage in staking their assets, thereby earning a yield paid out in the form of tokens. The funding for these rewards will be drawn from the Arbitrum treasury and will be disbursed over a 12-month period through the utilization of a smart contract.

The original proposal, which reached its finalization today, introduced a tiered system for allocating tokens, offering three options: 1% (100 million tokens), 1.5% (150 million tokens), or 1.75% (175 million tokens) of the total 10 billion ARB supply as staking rewards.

The decision reached by the DAO members leaned towards the allocation of the lowest tier, with over 66% of the members voting in favor of dedicating 1% (100 million tokens) to staking. However, a dissenting minority, constituting 33%, voted against the proposal, underscoring a community division regarding the utilization of treasury funds for staking incentives.

The annualized percentage yield is estimated to fall within the range of 7.84% to 78.43%, depending on the percentage of the ARB supply staked. Notably, this arrangement stands out as it enables stakers to earn token rewards from the treasury, in contrast to other mechanisms where tokens are staked to secure the network or distribute revenue.

Another Community Review

The DAO is gearing up to deliberate on a forthcoming proposal that will delve into the intricacies of the staking implementation. This will encompass key decisions such as selecting the technology service provider responsible for the implementation, outlining the associated contracts, and appointing an auditor to oversee the process’s integrity, as outlined in the proposal.

Following the completion of the contracts and audits, a two-week review period will be initiated, offering the community the opportunity to assess the implementations before they are set into motion.

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Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.

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