An ARB token delegate known as Frission has devised a novel concept. new proposal This plan intends to direct 50% of the extra sequencer fees to ARB owners who engage in staking and token delegation. The initiative aims to foster more proactive participation by ARB holders in governance activities.
The plan's objective is to enhance Arbitrum DAO's treasury security, which has accumulated substantial Ethereum assets. By June 21, the treasury's Ethereum is valued at about $50 million, as per Frission's observations.
Frission also highlights the risk to DAO's treasury due to low active involvement and declining voter turnout. Only a tenth of circulating ARB tokens are used for decision-making votes, and voter numbers have consistently dwindled since the DAO's inception.
Pushing Engagement
The new proposal is designed by Frission with the expectation of incentivizing ARB holders to be more engaged in governance through an ARB staking structure that rewards participants with surplus sequencer fees.
In particular, half of the forthcoming excess sequencer fees are expected to be directed toward those staking, resulting in an approximately 7% annual reward. Additionally, 1% of surplus fees are set to be divided among delegates, proportional to their Karma Score.
Importantly, this shift will only affect future fees the network generates, leaving the current ETH reserves untouched.
Beyond adjusting future network fees for staker compensation, the updated proposal intends to adopt Tally's liquid staking token system to ensure the ongoing liquidity of staked tokens.
The proposal seeks a singular retroactive payment of 100,000 ARB to accommodate development expenditures. If greenlit, the process will kick off with a snapshot temperature check in July, with plans set for a December launch.
This suggestion traces its roots back to a different proposal from last year, where the Arbitrum DAO recommended using treasury funds as incentives for staking activities.
Currently, ARB's value is approximately $0.81, reflecting a 3% increase over the past 24 hours according to CoinGecko data. The token recently faced a sharp decline, akin to other tokens, as Bitcoin experienced similar bearish trends, dipping under $59,000 but climbing back to $60,000.
Community Controversy
Arbitrum DAO has encountered community pushback concerning its proposed Gaming Catalyst Program (GCP). Initiated in May, the GCP's goal is to allocate 225 million ARB, equating to around $250 million, to propel Web3 gaming's expansion within the Arbitrum network over three years.
The GCP is set to engage more game developers to harness Arbitrum technologies, attract and nurture talent, broaden Arbitrum's application range, and aid in crafting high-quality, ambitious games that resonate long-term.
However, the hefty budget raised eyebrows among the community, leading to questions about the necessity for such a substantial allocation. Concerns were voiced about directing 25 million ARB toward operational expenses, an increase from the initially proposed 10 million ARB.
Detractors argue that the entire funding size of 225 million ARB may be disproportionate given the present condition of Web3 gaming. Additionally, the existing quality of Web3 games appears lacking, suggesting such a major investment might be unwarranted, according to some community voices.
Despite the stir, the proposal secured approval, with 76% voting in favor earlier this month.
“Arbitrum cements its place as the epicenter of gaming, encompassing games, gaming channels, and all the creators within its sphere,” said Treasure DAO regarding the proposal's approval.
The voting outcome saw a plethora of key players advocating for the proposal, including L2beat, Wintermute, and Treasure DAO, while Blockworks Research and Camelot DAO stood in opposition.
