Decentralized autonomous organization Arbitrum has approved a governance proposal that will allow holders of its ARB token to stake their assets in exchange for proceeds paid out in tokens. This is financed by Arbitrum’s treasury and spread over twelve months via a smart contract.
The proposalwhich concluded today, originally presented a tiered token allocation system, with options to receive 1% (100 million tokens), 1.5% (150 million tokens), or 1.75% (175 million tokens) of ARB’s total supply 10 billion to be allocated as strike awards.
The annualized return is estimated between 7.84% and 78.43%, depending on the percentage of the ARB offering deployed.
The majority – over 66% of DAO members – voted for the lowest level of allocating 1% (100 million tokens) to staking. A minority, 33%, voted against the proposal, indicating a disagreement within the community over the use of state funds to deploy incentives.
This arrangement grants stakers a token return from the treasury, which is different from other mechanisms where tokens are deployed to secure the network or distribute revenue. Consequently, the recently adopted proposal has attracted some criticism.
Another community review
The DAO will consider a subsequent proposal that will focus on the specifics of strike implementation. This includes determining the technology service provider for the implementation, associated contracts and the selection of an auditor to ensure the integrity of the process, the proposal said.
Once the contracts and audits are completed, there will be a two-week review period – during which the community can evaluate the implementations before they go into effect.
