Arbitrum DAO has approved staking proposals for better ARB utility and enhanced governance security. This proposal was approved by a whopping 91% from more than 25,000 participants in an on-chain vote.
With the approval in place, ARB token holders can now stake and delegate their tokens in exchange for a liquid staked ARB token (stARB). The stARB further offers auto-compounding of future rewards, restaking options, and compatibility with decentralized finance(DeFi) apps.
📢 The Arbitrum DAO has approved a temperature check proposal concerning ARB staking.
➡️ The proposal suggests allowing ARB holders to stake and delegate their tokens, receiving a liquid staked token in return that represents their stake. pic.twitter.com/rd5h9mwBJM
— CrypThing News (@AncientCallsBC) August 16, 2024
The execution of stARB works using Tally’s liquid staking token system. The liquid staking system will be customized to accommodate Arbitrum’s governance architecture and fee collection mechanism. In addition to this, ARB token holders who stake and actively delegate their tokens to “active delegates” will be rewarded with future surplus sequencer fees.
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A Karma Score is used for defining active delegates. This score is calculated by combining Snapshot voting stats, on-chain voting stats, and forum activity.
The Arbitrum DAO can adjust the Karma Score formula using consensus and set the minimum score required for delegates to be eligible for staking rewards.
The move is also aimed to prevent potential governance attacks, especially as the appeal of the Arbitrum treasury continues to grow, thanks to the 16 million ETH in surplus fees accumulated from Arbitrum One and Nova.
Recently, Arbitrum was ranked as the second most used network for Ethereum L2 transactions, and a staking approval like this can further help the network grow.
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