Arbitrum DAO boosts ARB utility with staking and governance upgrades

The Arbitrum DAO has recently approved a temperature check proposal aimed at enhancing the ARB token's utility and improving governance security. This proposal received robust support, with 91% approval from over 25,000 participants, and was finalized on-chain on August 15.

ARB Staking and Governance Enhancements

The proposal's primary focus is to boost the utility of the ARB token by introducing ARB staking. While it does not include immediate fee distribution to token holders, it introduces a liquidity-staking token, known as stARB, via the Tally protocol.

Under this new mechanism, ARB holders can stake and delegate their tokens in exchange for stARB. This token represents their stake and supports automatic reward compounding, restaking options, and compatibility with various DeFi applications. This initiative is expected to enhance engagement within the Arbitrum ecosystem by encouraging active staking and delegation. Stakers will be poised to benefit from surplus sequencer fees in the future, further incentivizing participation.

Addressing ARB Underperformance and Security

The proposal addresses key issues related to the ARB token’s underperformance, noting that less than 1% of ARB tokens are actively used in the on-chain ecosystem. Additionally, voter participation has been declining since the DAO's inception.

To bolster governance security, the proposal emphasizes the importance of protecting the Arbitrum treasury from potential attacks. With the treasury growing, it has become a more attractive target for malicious actors. Implementing the staking mechanism and ensuring active delegation are intended to fortify governance and safeguard the treasury’s integrity.

Recent Developments

In June, Arbitrum allocated 225 million ARB tokens, valued at approximately $215 million, for the Gaming Catalyst Program, which will span the next three years. Earlier in March, the DAO rejected a proposal to cover legal expenses for Tornado Cash developers Roman Storm and Alexey Pertsev.

This strategic move by the Arbitrum DAO aims to enhance the ARB token's value and ensure a more secure and engaged governance structure.

source: https://cointelegraph.com/news/coinbase-cbbtc-boost-bitcoin-defi