Hey Frisson, thanks for submitting this proposal. I really like the “one stone, two birds” design: it solves the potential security issue for the Arbitrum DAO while at the same time add a new utility to ARB token!
I would like to make a suggestion to improve the proposal. In the current design, the ARB tokens locked in the staking contract is unproductive. I propose to make use of those unproductive ARB tokens via Double Restaking as illustrated in the diagram below:
The design is that ARB holders deposit ARB into ArbGov staking contract, and then the ArbGov staking contract will automatically deposit ARB into Double, and vice versa. The value proposition is simple and clear: 1) the unproductive ARB will now be used to support on-chain liquidity of ARB; 2) ARB holders can earn additional yields from Double’s incentives on top of DAO treasury. With Double Restaking, ARB holders don’t need to choose between yield from staking or yield from AMM. They will get both!
For people who are not familiar with Double, the ARB will be deposit into the Token side of Double as shown in the diagram below:
In the current design, the token side always get back their token that are matched to capital providers. The concept of IL does not apply to the token side.
(Please note: currently, ARB is not configured as a capital type on Double, only USDC/USDT/DAI/WETH are configured as capital types. There is a discussion on whether ARB should be used as a capital type, which will add another utility for ARB. But that should be a separate discussion and will not have any impact on this proposal.)
Even though the token side won’t earn the AMM trading fees, it will, by design, receive Double’s incentives via Double Dip Joy (DDJ), a utility ERC20 token that has no pre-mine and strong protocol native demand. The ArbGov can decide how to handle the DDJ received: 1) pass DDJ directly to ARB holders; 2) convert to stable/ETH and then pass along to ARB holders; 3) take a cut.
There is a little technical work required for integration and Double will work with Tally team on the technical integration. The timing is good though since the staking contract has not been deployed yet. (The Double restaking is designed to work with veToken model as well. But it will require contract upgrade if the veToken contacts have been deployed).
In addition, Double will work with Tally and ArbGov to support the on-chain liquidity for Tally ARB LST, which is important for ARB LST holders and also critical for many DeFi integration of ARB LST such as Pendle.