Huge Development for the Altcoin: Staking Begins!

The altcoin Arbitrum has made a groundbreaking decision to implement a staking feature for its native token ARB in the Ethereum Layer 2 (L2) ecosystem. This development draws attention with the potential to make Arbitrum the first ETH L2 to offer staking rewards to token holders.

Generate income with liquid staking method

The proposed staking mechanism involves a collaboration with Tally to create the liquid staking governance token stARB. Users will be able to stake ARB tokens to receive stARB while preserving their existing governance delegation rights. stARB enables users to gain governance authority through staking while also using ARB tokens in DeFi or potentially for restaking. This way, users will have a say in governance while also generating passive income.

However, explicitly waiving voting power while investing in stARB within DeFi protocols is a topic of debate. The logic behind this design choice is not yet fully understood. As the ETH reserves of the Arbitrum DAO increase, the potential for governance attacks also rises. However, the cost of defending the network through ARB voting power does not increase proportionally. Providing an additional benefit for the ARB token could strengthen network security by raising the cost for attackers.

Altcoin treasure has risen

The Arbitrum DAO treasury currently holds $45 million worth of ETH obtained from excess fees on Arbitrum One and Nova. The DAO has the option to initiate fee sharing from revenue generated by sequencers and MEV, and stARB will automatically aggregate these rewards. This will not only ensure the growth of the DAO treasury but also provide additional income opportunities for token holders.

Although the snapshot proposal has received overwhelming support with a 99% approval rate, it still requires a Tally vote on the chain. If this vote is similarly successful, the Tally implementation proposal is expected to be launched in October following an audit. The introduction of staking features for ARB by Arbitrum marks the beginning of a new era in the Ethereum L2 ecosystem. This development will provide new income opportunities for users while also enhancing the security of the network. However, discussions are still ongoing about certain aspects of the liquid staking mechanism.

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