Arbitrum community sees new proposal for ARB staking and incentive distribution to users

Arbitrum governance aggregator PlutusDAO has launched a proposal suggesting ARB locking mechanism and distribution of incentives to users.
PlutusDAO proposes minting 1.75% of the token supply and distributing the token inflation to users who lock their ARB tokens.
The proposal will help generate native yield in ARB and set Arbitrum apart from other Ethereum Layer 2 projects in the ecosystem.

PlutusDAO, governance aggregator on Arbitrum submitted a proposal suggesting a token locking mechanism and new incentive for ARB token stakers. The distribution of token inflation to users as incentives could help differentiate Arbitrum from its Layer 2 competitors.

Also read: Coinbase CEO Brian Armstrong’s stablecoin hot take: Flatcoin linked to CPI

Arbitrum community comments on proposal for new incentive opportunity

PlutusDAO has proposed a new incentive for ARB token users, in exchange for locking tokens. The governance aggregator suggests minting of 1.75% of the token supply, while the DAO currently has the right to mint 2% of the total supply each year.

PlutusDAO recommends distribution of the inflation to ARB community members who lock their ARB tokens. The proposal suggests a staking contract where ARB can be locked for up to 365 calendar days, where users have the option to increase or pause their lock times and claim their ARB emission proportional to their locked tokens.

ARB users who withdraw their tokens before the lock in period could face a penalty and the penalty collected is then shared between remaining users.

The ARB community members shared mixed reactions to the proposal, with some asking for a different locking formula than linear and some supporting the initiative.

At the time of writing, ARB price is $0.8607, the Layer 2 token is down 4.18% on the day. Over the past month, Arbitrum yielded nearly 25% losses for holders on Binance. It remains to be seen whether the proposal will catalyze a recovery in ARB price.

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