The decentralized autonomous organization (DAO) governing the Ethereum-based layer-2 scaling solution Arbitrum has approved a proposal allowing users to stake ARB tokens and earn rewards. The proposal was introduced on October 30 and received 66% approval from ARB token holders, with 33% voting against it.

With the Arbitrum DAO treasury holding a significant amount of ARB tokens, the proposal aims to distribute rewards to token holders through a staking mechanism. This move is seen as a way to incentivize long-term token holders and promote interest in the Arbitrum ecosystem.

The Arbitrum Coalition, consisting of Blockworks Research, Gauntlet, and Trail of Bits, will monitor the effects of the staking mechanism over 12 months, providing regular updates and qualitative reports to the community. Their goal is to recommend a sustainable incentive model for the ARB token.

During the 12-month trial period, ARB holders can lock their tokens for up to 365 days, adjust their lock times, and claim rewards based on their staking duration. The proposal included different funding options for the staking mechanism, with the option to allocate 1% of the total ARB supply receiving the most votes.

Before staking begins, the DAO will release another proposal to determine the service provider, associated contracts, and an auditor for the implementation. These contracts and audits will be reviewed by the community for two weeks before deployment on Arbitrum.

By Nadeem Alam

Nadeem Alam is a crypto enthusiast with strong background in Public Relation, working in the blockchain industry for 4 years. Experienced in developing and executing innovative marketing strategies.

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