- In order to increase the security of Arbitrum DAO, a governance proposal proposes compensating people that stake and delegate ARB tokens.
- It proposes rewarding ARB delegates with half of the Arbitrum network’s future surplus sequencer fees.
As a delegate in the Arbitrum ecosystem and a key team member at Tally, Frission has proposed a mechanism that gives holders of ARB tokens who actively stake and delegate their tokens 50% of future surplus sequencer fees.
The proposal focuses on security concerns with the growing treasury of the Arbitrum DAO, which now has excess fees over $50 million. It said that because voter turnout is dropping and only 10% of ARB are actively employed in governance, the Treasury will be vulnerable to potential governance concerns. Frission’s proposal aims to increase the DAO’s economic security, decrease the likelihood of Treasury attacks, and promote governance engagement.
In order to recoup 50% of future excess sequencing fees, the proposal would let ARB holders stake and assign their tokens. Based on current prices, it is anticipated that this method will provide stakers with an annual reward rate of approximately 7%. Crucially, the current Arbitrum ethet treasury would not alter; the only thing that would change is that stakers would only receive future fees.
To maintain liquidity for staked tokens, the plan incorporates Tally’s liquid staking token mechanism. Stakeholder positions could take part in governance using this technique while still preserving liquidity.
Next month, a preliminary temperature check vote on the proposal is planned on Snapshot. Development of smart contracts will start if they are authorized, and the last on-chain voting might take place in September.
Another idea from last year suggested that the DAO fund the staking income with Arbitrum treasury funds and distribute it to stakers over a 12-month period via a smart contract. It got criticism about its viability after passing the first temperature test and delaying a formal AIP.
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
