It is a little dissapointing that on the chain that “real yield” was pioneered, the token released does not implement a mechanism to fall into that category.
Token holders want to OWN the protocol. And that means getting a cut of its revenue…
Governance is also a JOB, wich should be compensated for. if not, its prime for bad actors to take care of governance.
If they are not getting a stream of revenue, token holders have bad incentives to participate in governance. Their incentive basically rn is “make price of arb go up”.
This all is resolved with value accrual for the token from the sequencer fees and it has many more pros:
permisionless and decentralized validators, making the network more secure and fair.
real yield and value accrual for token.
part of the fees generated by the sequencer can also be directed to the treasury, creating a sustainable funding source for the network’s development and maintenance. This can help to ensure that the network remains healthy and robust in the long term, without having to rely solely on funding from current ARB holders.
I also feel like Arbitrum would further differentiate itself from its main competitor this way (Optimism).
If revenue were to be generated on the Arbitrum chain, it would most likely result in an increase in gas fees. However, low fees are a core feature of Arbitrum and introducing revenue would go against that principle, potentially leading to a decline in adoption of the chain.
Instead of focusing on generating revenue, Arbitrum should prioritize building a strong and sustainable platform that empowers the projects building on it. By doing so, it can attract more developers and users to its ecosystem, which in turn can help drive its growth.
If you’re interested in revenue-generating DAOs based on arbitrum, there are a few options. I suggest you go read about those instead.
edit:
Introducing revenue by holding it’s tokens would classify it as a security, which brings a lot of legal and regulatory complications. I don’t assume I have to tell you this is bad.
Revenue is already being generated and kept for themselves. A privileged set validators hand picked. Or do you think they are running validators for free ?
Then every other POS blockchain (including ETH) would classify as a security, because this how they operate.
Revenue is already being generated and kept for themselves. A privileged set validators hand picked. Or do you think they are running validators for free ?
Some trusted validators are being paid to have a node, yes. These parties include trusted entries in the industry and some have significant assets on the chain may choose to validate in order to protect their investment. I don’t believe in paying users for running a validation node, bitcoin doesn’t seem to need to pay it’s users. Why should we?
The ARB token should be for the government, not creating revenue. This could satisfy one of the points of the Howey test, which could mark its status as a security. Furthermore, if your proposal turns real, then it could be classed as a security because validators will receive rewards from themselves and others validating the Arbitrum network, as there is an expectation of profit “derived from the efforts of others.”
Although this depends on the country. NYAG has been looking into classifying ETH as security; Especially since they turned POS. I don’t believe in an ARB that generates revenue for its users. The government is to create the best conditions for the chain and for projects to be built on. We should ensure the lowest fees possible.
Why do the validators should not be permisionless?
Why, in your model, ARB token holders would vote for the good of the chain if they have nothing to win from it? Why would they care if they dont have any financial incentive? Its like being a business owner but you dont get its revenue. (hint: they allways have a financial and they will act bad, for example diverting funds to 3rd party things that benefits them or whatever. It would just like an ad-honorem politician. )
**Best way to make the chain sustainable is that the voters are aligned with long term success of it, and the best way to do it is through staking / veLOCKING / give revenue etc. **
I really dont care if 1 nation-state out of 200 thinks its a security or not. This is crypto. Its a new system to break from the rigged one, and it should be properly aligned.
It’s my understanding that currently validation is permissioned, but Arbitrum is on its path towards permissionless validation. Which is why they annonced a bunch of expanded validator set.
Essentially, there is a need to differentiate between the Arbitrum Chain and the various projects that utilize it to build Dapps. The success of the projects is dependent on the success of the chain, as it generates traffic, which generates revenue. However, if the chain is driven by the desire for profit, the projects will indirectly bear the cost. This could lead to decreased adoption rates, as a potential solution may be to raise the gas fees. This is counterproductive, as people were attracted to this platform due to the lower gas fees in the first place.
I really dont care if 1 nation-state out of 200 thinks its a security or not. This is crypto. Its a new system to break from the rigged one, and it should be properly aligned.
Okay, your point is noted. However many seem to go in the same footsteps as America, and projects which are based in the USA would be subject to the same laws. I think it’s impossible to say how much I disagree with your objective on this.
This is active question and rampant in any network, recent launching program are kind of private. To me arbitrum success is not dependably linked to the its network nodes operating system but its convenience with fee and running fast request.
gmx, gns and Vela are highly consuming the 80% of the network activity imo for handling big wave of traders, which is not able on other chain. That’s already a success.
There are exchanges and other Dapp offering ARB staking already for incentives. But there’s no staking platform made by the foundation for exclusive earnings. That’s really upsetting and may have hidden responses. ( regulation probably)
Also i think the ecosystem is mostly rolled by the developers and people with keen eyes in the ecosystem. Why would they get rewarded for taking decision. :))
not everybody lives in a society that views this as a security plus I guess there is no need of the token, which I mentioned to you in the other post. THere’s certainly no need for a needless token at a dollar 20 american per token… that’s just fleecing people unless the point is that retail will get dumped on by massive airdrop farmers (which is the case).
Guess nobody else saw the Vietnamese guys farming hundreds of wallets with thousands of arb tokens each and all simultaneously unloading at 8 dollars through the depostiter contract itself on arbiscan…
I don’t agree with this. The way that DeFi has been using veTokens has left a lot to be desired, but there are highly aligned ways to do this better. The idea I shared is similar, but wouldn’t require veTokens to execute.
I did see the sybil issues. Those happen. I do think it could have been handled better, but that is coming from a person who spent the last 2 years fighting sybils at Gitcoin. Realistically, the team did a great job of actually looking into it and minimizing the impact. Yes, some sybils got through, but their impact was minimized. imho.