- 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.
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.
Bitcoin, altcoins, stablecoins FAQs
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
Bitcoin dominance is the ratio of Bitcoin’s market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
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