This is one of the more exciting developments occurring in Ethereum L2 land - can’t wait to see it go live. Stage 2, here we come!
I read the full proposal, all the comments, and the FAQ linked above (still need to watch the governance call recordings). However, my one concern comes down to paying out proposers in ETH - targeting the ETH staking yield. I understand the idea is to compensate proposers for the bond / opportunity cost associated with that (which is of course the eth staking yield), but I do not love the idea of having service fees denominated in a currency that we cannot control and have a small amount of in our treasury.
This is the classic emerging markets problem where nation states have a sovereign fiat currency that devalues versus their USD denominated debt obligations, which requires more native currency creation to pay USD liabilities and ultimately devalues the native currency further.
In this example, ARB is the EM’s sovereign fiat currency and WETH is the USD debt obligation.
I do not have a good solution. On the one hand, we want a diverse set of proposers further down the line… but we cannot do that under the proposed structure without scaling ETH costs (with ETH revenues ironically on the decline). On the other hand, if the service fee is paid in ARB, and the USD (or ETH) value of that ARB decreases, the SECURITY of the network decreases in tandem. The latter is clearly the worse option between the two.
I am all for passing this proposal as is, but the DAO must proactively consider this to ensure the long-term sustainability of permissionless validation via BOLD.