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Arbitrum Community Members Accept Initial Vote On Token Staking

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Last updated on November 13th, 2023 at 11:04 pm

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The framework of the $ARB token staking will no longer involve token minting; it will now be funded by the treasury. A final vote will be conducted to cement things further.

Arbitrum’s community members have given their approval for an initial governance vote to a token proposal that will introduce staking for ARB token holders. Token holders will now be able to stake their ARB tokens for yield. 

The yield will be distributed from the Arbitrum treasury in 12 months through the use of a smart contract, as outlined in the PlutusDAO proposal.

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The initial stage of the governance vote for the proposal, which received approval on November 6, initially introduced a structured framework for token distribution. 

This framework provided options for allocating staking rewards from the total supply of 10 billion ARB tokens, with choices of 1% (100 million tokens), 1.5% (150 million tokens), or 1.75% (175 million tokens)

The Arb Foundation conducted what they referred to as a “temperature check vote” via a snapshot. Which revealed a disagreement concerning the decision to use the treasury funds as staking rewards. 

A significant majority, (66% of DAO members) expressed their support for 1% of the total $ARB supply to be used for staking. On the other hand, 33% of the DAO members opposed the vote.

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After the conclusion of the ‘temperature check’ voting phase, the DAO will deliberate further on a subsequent AIP proposal that will detail the specifics for implementing the proposed staking. 

Additionally, a final community vote on Tally, an on-chain DAO management platform, will be essential to ultimately grant stakers a token yield from the treasury.

This yield is entirely different from mechanisms where tokens are staked for network security or revenue distribution.

The estimated annualised percentage yield falls within the range of 7.84% to 78.43% when 100 million tokens are utilised, depending on the proportion of the ARB supply that is staked.

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