Arbitrum’s governance community has cast a decisive vote to kick-start a staking rewards program. Over two-thirds of the members greenlit the initiative that promises to allocate 1% of ARB tokens from the treasury for staking yields. This tiered proposal, aiming to encourage token holders to stake their holdings, represents a strategic deployment of 100 million tokens from the project’s reserves.
Distribution and Yield Expectations
The chosen approach is set to distribute the staking rewards over 12 months via a dedicated smart contract. Stakers are poised to receive an annual yield of 7.84% to 78.43%, contingent on the total ARB tokens staked. This decision underscores a commitment to incentivize participation among token holders, enhancing the overall economic activity within the Arbitrum ecosystem.
Despite the consensus, a third of the voting bloc opposed the move, igniting a debate over the optimal use of treasury funds. The detractors question the efficacy of using treasury tokens for yield generation rather than securing the network or sharing revenue.
Staking Implementation Roadmap
In addition, the community is getting ready to make more decisions about precise changes to the staking mechanism. Significantly, the upcoming proposal will deliberate on the selection of a technology provider, the formation of smart contracts, and the critical appointment of an auditor, which are crucial to upholding the integrity and security of the staking process.
Once the community reaches a consensus on these logistical elements, a two-week review period will follow. During this time, the Arbitrum community can examine the implementations thoroughly. Only after this meticulous evaluation will the staking program come into effect, ensuring a transparent and considered approach to the new staking strategy.
ARB Price shoots
Arbitrum’s native token (ARB) has experienced a notable price increase following the approval of the token staking proposal. Consequently, the market has reacted positively to this development, with ARB’s price soaring to $1.13, a 3.14% rise in the last 24 hours. Moreover, this uptrend reflects growing trader interest, as highlighted by the elevated trading volume, which has surged to $358,674,886.
ARB/USD 24-hour price chart (source: CoinGecko)
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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