Abritrum New ARB Token Empowers Holders Abritrum
Arbitrum fter much anticipation, is poised to grant ARB token holders voting rights for decisions affecting the primary Ethereum layer 2 network. The leading contender in Ethereum’s layer 2 scaling space, Arbitrum, is finally introducing its token. On Thursday, March 23, the Arbitrum Foundation will distribute the new ARB token to community members. This token will symbolize Arbitrum’s official transition to a decentralized autonomous organization (DAO), empowering holders to participate in voting for crucial decisions related to Arbitrum One and Arbitrum Nova—networks that facilitate faster and more cost-effective transactions on the Ethereum blockchain.
“Arbitrum DAO will have the power to control key decisions at the core protocol level, from how the chain’s technology is upgraded to how the revenue from the chain can be used to support the ecosystem,” the Arbitrum Foundation stated.
Although the majority of ARB tokens (44%) will be distributed among investors and key contributors by the Arbitrum Foundation, Offchain Labs – the creator of Arbitrum – asserts that this approach will result in a more decentralized Arbitrum ecosystem compared to other scaling chains.
“For me, the most exciting part is the decentralization – the fact that Offchain Labs will no longer have any control over the future of this chain,” Offchain Labs CEO Steven Goldfeder stated. “We will be a service provider, and if the DAO calls on us to build software, we will.”
In February, Arbitrum collaborated with crypto analytics firm Nansen to take a “snapshot” of user activity to determine who qualifies for ARB tokens. Factors such as the number of transactions, the variety of applications used, and the duration of usage on Arbitrum One and Arbitrum Nitro were taken into account to determine eligibility, according to Goldfeder.
Users of Arbitrum can visit to verify their eligibility and claim tokens, but caution is advised due to scammers who use airdrops to deceive people through fake websites and other tactics.
The page will look like the image below, in which you connect your wallet to check this eligibility:
And after checking eligibility, you will get your results as such:
Then from the official website, these are the qualifying actions under those sections on the right:
You will see this once you click those menus down.
The total number of ARB tokens in circulation will be 10 billion. The community will control 56% of these tokens, with 11.5% being granted to eligible Arbitrum users through the airdrop and 1.1% being given to DAOs that operate within the Arbitrum ecosystem. The remaining community tokens will be held in a treasury controlled by the new Arbitrum DAO, allowing ARB holders to vote on the distribution of funds.
The other 44% of ARB tokens will go to investors and employees of Offchain Labs, the development firm behind Arbitrum. CEO Goldfeder explains that these tokens will be subject to lock-up periods and vesting schedules, but the proportion of ARB reserved for insiders is relatively high compared to similar projects. For example, Optimism, Arbitrum’s primary competitor, granted 36% of its OP tokens to investors and key contributors.
Unlike ETH, used to pay transaction fees on Ethereum and Arbitrum, the ARB token will only be used for protocol governance. The governance process of the Arbitrum DAO will be self-executing, allowing votes to directly modify the core code of Arbitrum. Code changes will be subject to a delay to allow for audits and other security considerations, but a 12-person security council governed by the Arbitrum DAO will be able to make faster bug fixes.
The release of ARB is timed to coincide with the debut of Arbitrum Obit, enabling third-party apps and protocols to build new “layer 3” blockchains on top of Arbitrum’s low-cost infrastructure.
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