The Arbitrum Decentralized Autonomous Organization (DAO) has approved a proposal that allows ARB token holders to stake their tokens in return for a yield. This decision has led to a surge in the price of Arbitrum (ARB), with the ARB price currently standing at $1.13, representing a 3.14% increase over the last 24 hours.
The market capitalization of the cryptocurrency currently stands at $1,439,342,086, placing it at the 39th position in the market cap rankings. In addition, ARB’s trading volume over the past 24 hours has escalated to $358,674,886, reflecting a significant increase in trading activity.
How Arbitrum Token Holders Can Earn Yield from the Treasury
The funding for the yield will be sourced from the treasury of Arbitrum and will be distributed over 12 months via a smart contract. The initial proposal suggested a tiered system for the allocation of tokens. This included options to allocate 1% (equivalent to 100 million tokens), 1.5% (equivalent to 150 million tokens), or 1.75% (equivalent to 175 million tokens) of the total supply of 10 billion ARB tokens as rewards for staking.
More than 66% of the DAO members voted in favor of the lowest tier of allocating 1% (100 million tokens) toward staking. A significant portion of the community, 33%, voted in opposition to the proposal. This vote underscores a divergence of opinion within the community about the utilization of treasury funds for staking incentives.
The projected annual percentage yield (APY) ranges from 7.84% to 78.43%, contingent on the proportion of the ARB supply that is staked. It’s worth noting that this setup allows stakers to earn a token yield directly from the treasury, which is a departure from other systems where tokens are staked to either secure the network or distribute revenue.
The DAO is expected to evaluate a follow-up proposal that will delve into the details of the staking execution. This encompasses the selection of a technology service provider for the execution, the related contracts, and the appointment of an auditor to guarantee the transparency and fairness of the procedure.
Upon the completion of the contracts and audits, a two-week review period will be initiated. This period allows the community to scrutinize the implementations before their activation. This decision by the Arbitrum DAO marks a significant step in the evolution of the ARB token and its ecosystem.