David Edwards
The Arbitrum DAO has overwhelmingly endorsed the introduction of ARB token staking, with 91.5% of voters signaling approval. This initiative aims to enhance both governance and security within the Arbitrum network.
According to a temperature check proposal led by Frisson, Tally’s head of marketing, the staking mechanism is intended to boost active participation in governance. Currently, only 10% of ARB’s circulating supply is engaged in governance activities, with voter turnout declining since the Arbitrum DAO’s inception. The new staking model is expected to incentivize ARB holders to delegate their tokens to active governance participants, allowing them to capture value. Additionally, a liquid staked ARB token (stARB) will be introduced, enabling the auto-compounding of potential future rewards and facilitating integration with decentralized finance (DeFi) applications.
A crucial aspect of the staking proposal is its function as a safeguard against governance attacks. The Arbitrum DAO treasury, which has accumulated over 16 million ETH in surplus fees, is becoming an increasingly attractive target for malicious actors. Frisson emphasized that the growing value of the treasury heightens the risk of such attacks, making the implementation of staking an essential security measure.
Tally has been allocated a $200,000 budget in ARB tokens to develop the staking solution, with smart contract audits anticipated to conclude by September. Full implementation of the staking mechanism is scheduled for October. Despite this positive development, ARB’s price has continued to decline, trading nearly 3% lower, according to data from crypto.news.
This approval coincides with Franklin Templeton’s recent announcement to launch a money market fund on Arbitrum. The $1.66 trillion asset manager is set to introduce the Franklin OnChain U.S. Government Money Fund (FOBXX), which will also be available on Stellar and Polygon networks.
