Proposal: Activate ARB Staking (FINAL)


I, much like L2BEAT, find myself pondering the proposed minting and subsequent staking mechanism aimed at alleviating some of the inflation. I contend that fostering scarcity, achieved through burning ARB, as opposed to minting additional ARB, represents a more favorable approach for long-term holders.

The minting of 200 million ARB tokens for rewards would lead to a supply increase of approximately 15.69%, as calculated by [(1,475,000,000 - 1,275,000,000) / 1,275,000,000] * 100. Such inflation rates are notably high, even when considering the conservative 1% proposal, which would still result in an inflation rate of 7.85%.

To provide context, in traditional finance, developed countries typically experience an average inflation rate of around 2%. Additionally, when examining other crypto projects, one can find numerous unfortunate examples where excessive token issuance has had detrimental effects.

It is my assumption that, due to the expedited timeline and what appears to be a lack of long-term vision, the PlutusDAO has crafted this proposal primarily to fulfill their commitments to PlutusDAO investors who converted their ARB into plsArb with the expectation of native yield, only to find themselves in a challenging position.

O/T: I also ponder whether the Plutus Team should have the ability to vote on any Governance proposals with the ARB acquired through their plsArb offering. PlutusDAO is merely a “DAO in name” as there is no governance module in the project itself. Nevertheless, they did acquire over 9 million ARB through this plsArb offering, which they can use for voting.


Why so hurry about that? why don’t we wait until there?


I know this is a long shot, but it would be unique and awesome if Arbitrum could become the community that holds each other accountable.

In this case, Plutus DAO is infamous for their misleading advertising during the airdrop that tricked millions of arb into locking and then spending the next several months gaslighting retail investors who felt misled. This caused immeasurable damage to the ecosystem’s reputation and countless people have been turned off to investing in arbitrum because of it. We should not reward people who act in this manner.

There is no strategic ecosystem advantage to this proposal. While the token needs utility is doesnt need inflation for inflation’s sake. Thats all this is. Printing more ARB in the hope that certain lockers can disproportionately benefit.

The only group this helps is people who launched a “governance blackhole” and now need an excuse to lock tokens to prevent people getting their money out of their protocol. I do not think we should turn up the inflation just so the Plutus team can justify holding 10 million arb hostage from unwitting retail investors.



Plutus does not have the power to hide any posts under this discussion (or any discussion for that matter). If your post was removed, it was by a moderator on this forum and likely because you broke the rules of the forum or were spreading blatant misinformation.


Hey guys,

Thank you for the thoughtful feedback - much appreciated!


Just because a function can be called doesn’t mean it has to be called.
Arbitrum has a lot of ways to utilize within the ecosystem. GMX, Premia, Silo, etc.

Think the inflation just through the grant process in 2023-24 will be sufficient in terms of what stakeholders have an appetite for. But as a first step, maybe preparing a pitch with some quantitative metrics and like-for-like comparable numbers to other protocols that have successfully established a voting escrow model with irregular inflation, what percent of outstanding issuance is locked, any other projects that have a mint function they regularly call, how successful those projects have been, etc. The governance call L2BEAT runs now has a good mix of diverse attendees, so you should be able to get solid feedback on that call.


plutus are just trying to get $arb holders to pay for fixing their failed broken product

why should $arb holders have to pay for plutus’s failure?


My primary concern here is that we’re creating a problem (inflation) then creating a staking mechanism to combat the problem we introduced. Once this is approved one time, it will be that percent inflation or higher until the DAO is out of ARB, so we should definitely make sure there is ample time for all the smartest people involved in Arbitrum to weigh in and get this right (the first time).

Past that, a secondary concern is why now? Pushing this to vote before we’ve seen the effects of the STIP and before we have all the data seems ineffective at best, but will also add sell pressure on top of the funds we’ve already approved. Minting becomes officially available in March and I don’t see sufficient reasoning to start distribution before that time.

We also have 50m tokens from STIP plus the undecided amount for round two entering the market over the next few months. If we add another 25m (3 months of 100m) will we be able to see the full effect of the STIP? Can we reliably separate the two?

I also don’t understand the narrative of ARB token needing utility (right now) as several projects have it included already, with even more on the way. Radiant, GMX, Plutus, Lodestar all currently have options for yield on ARB and Notional is currently voting to add ARB to their project when it’s fully launched as well. These are just off the top of my head and I’m sure I’m missing a lot.


I would support a floating staking mechanism based on block fees, similar to Ethereum. As the chain becomes more utilized and adopted, the participants of the network are rewarded for their hard work in this endeavor.

Staking reward equal to block fees up to a maximum threshold of 2% annually. It would likely start quite low % APY, but would have the potential to grow as the participants increase.


plutus want $ARB holders to fix their incompetence, aside from their broken product:

-they couldn’t even organise themselves to submit for round 1 STIP
-they can’t even distribute their own token rewards correctly and had to pause emissions

the proposal is dressed up as beneficial to the arbitrum ecosystem, make no mistake it’s sole purpose is to bail out the plutus team of their atrocious centralized decisions


Hi all,

All comments that relate to the proposal at hand are important, but it should be done in a manner that is civil and respectful to all parties. Comments like “bad reputation”, “scam”, or “bad actors” will be deleted.


Hey, great read!

I think it’s important to note that there’s no indication that Arbitrum’s leader election mechanism to decentralize the sequencer will rely on Proof of Stake. This suggests that if/when Arbitrum introduces new sequencers, they might not necessarily be required to stake ARB to engage in the network’s sequencing operations.

With that in mind, one can envision the DAO holding a vote to elect new sequencers and determine the allocation of sequencer revenues. Options might include a) allocating a portion to infrastructure providers and b) reserving the remaining funds for the DAO itself.

In the case of Arbitrum (i.e active and opinionated governance), such a model seems more logical than any other PoS systems in terms of both governance and revenue distribution. Thus, I don’t really see the link between ARB staking and the sequencer decentralization.

I am not sure this is a very orginal way to differentiate ARB from other L2 tokens. That’s why it’s worth considering other possibilities e.g if during a year, inflationary rewards are directed to the operators managing the sequencer, and a significant portion of the sequencer’s revenues are utilized to burn ARB, the token would result in net deflation by year-end. Under the assumption of a stable market cap, this would likely lead to an increase in the ARB’s price.

Giving power to the the DAO with decisions on sequencer revenues (i.e both fees and MEV) paves the way for different possibilities. These might range from (as mentioned) burning the funds, redirecting them to the treasury, supporting public goods, and so on.

I don’t think it would leave any party out and imho this model should be taken into consideration for this proposal.


After reading the proposal, I’d probably have to agree with others that I’m not sure I fully understand how the lock combats inflation by funding the project through minting more ARB. It will eventually catchup. I’d also add I’d be against effectively using the treasury funds to pseudo-access the minted funds before March 15th, 2024.

I’m not sure I’d support the proposal in it’s current form, as I think this is creating ‘yield’ through temporary supply-side tricks instead of creating a true yield-bearing asset through organic use within the ecosystem. Using the treasury over minting coins would be a more appealing option of the two if I had to choose, but this brings up the issue of how to maximize the value of the funds we have due to opportunity cost.

The question I think to ask is if incentivizing ARB holders to lock their ARB is going to provide value to the network over other methods of growth - grants to attract developers, payments to groups who are actively help Arbitrum succeed, etc. As this is essentially what a proposal like this is doing - paying people to not sell their tokens for a year.


Hey all, I spoke to @stonecoldpat in the DMs about why my previous post was hidden. He explained to me so I am reposting with the requested changes. Please do not hide this one. I have also tried to change my name on the forum so the word SCAM doesn’t appear anywhere. Sorry if that was wrong.

I have removed all opinions in the post and below is only facts

Plutus tell users that plsARB is not pegged because the arbitrum dao gives no yields to the underlying arb, so nobody has a reason to buy it. They are making this proposal so plsARB can have demand as they have forced 9M arb holders to lock forever.

MY OPINION: The Arbitrum DAO should not give them more ARB until they have made due on liabilities to their own users. It is our duty to help the plsARB holders escape this hostage situation as our incentives got used to enable it. We should not do it by giving out ARB yields but by holding plutus responsible for their own problems before we give them more money and yields.

Here is some needed history, backed by facts, without calling plutus a scam. The reader can decide for themselves if the arbitrum dao should consider proposals from this actor.

  1. The original airdrop enabled them to collect 9M $ARB tokens from regular airdrop participants. These participants have spent the past few months held hostage, and are now forced to accept less than 0.45 ARB for every ARB they deposited. This is how they did it:
  • Created a UI to “claim your arb airdrop”. By using the entire flow of this UI, users were not given $ARB tokens after claiming their airdrop, but instead plsARB tokens. The users ARB went into the pls treasury. It wasn’t until later that they added the disclaimer which explained ARB would be forever locked in the plutus treasury, but plsARB would be swappable for arb via an AMM at a market determined rate.

  • Then, if this UI wasn’t enough the plutus dao told users that plsARB is better than ARB because it would earn 2 things. 200% APR in PLS emissions and part of the ARB airdrop that the plutus dao itself got. This is tricky because they used the money the arbitrum dao gave them to entice users into giving them their own arb under the promise of getting paid extra arb tokens.

Today plsARB holders get 2% in PLS, not 200%, and they get 0 ARB yields unless we pass this proposal.

Opinion: saying “stake your ARB airdrop” is very different than the truth which would’ve been “forever lock your ARB airdrop and compete with 9M other ARB to exit in a $100k liquidity pool”

  • This exciting offer, coupled with the promise of liquidity if users wanted out, allowed them to suck in over 9 million arb tokens. This would be a great offering and not an issue if these users were happy and didn’t feel that they’d been tricked. But the truth is, thousands of small to large $ARB holders are stuck and begging to get out, but cant. Today these 9M arb are forced to accept less than 0.45 ARB per plsARB because the plutus dao is not doing anything to ensure good liquidity, despite having 100% of the 9M arb sitting in a wallet, fully able to provide deep liquidity at 1.

  • Here is their attempt to damage control the situation, please read the responses from real users to see evidence that users have been tricked and want out. This is just the comments on twitter. It is a fact, not an opinion. Every single day multiple users come into the plutus discord and ask how to get out, only to be met with the team saying something like “too bad you should have read the docs”. Many end up banned and silenced with their arb trapped in the dao treasury:

  1. The team promised deep and well incentivized liquidity. Instead they added $100k of liquidity themselves (this is less than 1% of all the plsARB in existence) and incentivized a 0-1 LP pool which ultimately ensures the price is… not 1 ARB per plsARB. Even if users knew they would have to swap out in the AMM, they would assume deep liquidity would mean far far more than 1%.

  2. No voting: plsARB holders have no rights to use the underlying ARB to vote. plsARB holders cannot vote for themselves to be freed, they cant even lobby for pls holders to free them as plutus advertises itself as a dao but has no voting.

The team just decides how to wield the DAO arb, and uses it how they please (

Additionally, in the recent STIP grants votes for the arbitrum DAO the team used the ARB underlying the user owned plsARB to vote yes for teams they like. PLS holders had no say, plsARB holders had no say. The plutus team just voted to give their friends more ARB tokens using tokens that belong to ARB airdrop participants. (opinion: this is poor governance for our dao)

  1. Discord users have made suggestions to repeg plsARB but the team will not accept any solution that involves redemptions. (opinion: many of these solutions are reasonable and would work. They are not short term minded)

  2. To make matters worse, the team stole a significant amount of the last ARB airdrop from the PLS DAO.

  • There was NO dao vote to give the team this supply
  • This was over $700,000 USD which they gave to themselves (already completed and sent to their own wallets)
  • the entire 9M of plsARB/ARB that they took from users got LESS of the airdrop than the team took for themselves

  1. Opinion/question: Ask yourself, why is there even a “liquid locker” for $ARB when $ARB cant be locked anywhere? They need to get us to do this because they don’t want to be responsible for the plsARB/ARB peg issues they created, and could easily solve.

Overall the plutus dao used the last airdrop to enrich themselves, trick users, and steal governance power in arbitrum. Tons of ARB airdrop holders are trapped and have no voice or vote to help themselves. Its time we help them or at least ensure we don’t enable more of this.

The plutus dao will likely give poor responses such as:

  • “PLS holders can vote to allow plsARB holders to redeem” (answer: pls holders would never do this as they want to keep all the arb underlying governance for themselves. But if even if they wanted to, there is no voting)
  • “We always said leaving would be at a market determined rate” (answer: this is a technicality they use to wash their hands of this scheme. Reality is they said you could swap out with deep liquidity but that’s non existent and mispriced.)
  • “We paid pls and arb emissions to get this arb, why would we give it back?” (answer: they could easily add a small redemption fee to cover that cost, as highlighted in discord by many)


Arb underlying plsarb


Blockworks Research supports adding an ARB staking mechanism funding the trial to the tune of 1% of the treasury. We believe this will create a worthwhile supply sink and source of demand for the token. We do have two questions:

  1. How might this impact ARB liquidity in exchange and lending markets?
  2. Is 12 months the right trial period?

While we objectively support the proposal without prior knowledge of the plsARB situation, we do believe it pertinent for the team to address the comment above.


The reply here is far from factual and we’re extremely disappointed to see misinformation and malicious targeting of individual projects spread on public governance forums, especially when the reply is not in any way related to the actual proposal that is supposed to be discussed. This proposal is not about Plutus or plsARB - it’s about creating an ARB staking mechanism beneficial to everyone.

That said, accusations of this calibre are not a matter we take lightly, so to avoid further confusion and misunderstanding we’ve prepared a response with all the facts below. For a truthful account of what has happened so far with plsARB, we recommend everyone reads the thread linked here.

To add more context for those interested, the below is a long-form response to a previous forum post that was targeting plsARB and Plutus. That post has long since been deleted for misinformation and false claims, but our original reply below is still relevant since the topics introduced are very similar. The quotations are text from the original forum post and the replies below them largely address all the accusations in the reply above.

This is the only reply we will give related to plsARB. plsARB has nothing to do with this proposal, and we encourage everyone to focus on the proposal at hand instead.

“To illustrate, Plutus has locked up various tokens such as $DPX and $JONES. The precise method of generating revenue from this arrangement remains unclear. Plutus is granting users rewards in the form of $PLS tokens to incentivize deposits. Once a user has contributed to a Plutus token, the conversion is permanent. The sole exit route involves selling the wrapped token on a DEX. These wrapped tokens, on average, are trading at less than 60 cents on the dollar.”

We are extremely clear and upfront about how plsAssets function in our docs. plsARB functions exactly the same as any other plsAsset. The ratio between an asset and a plsAsset varies, predominantly according to the user’s collective demand for the yield of the underlying asset.

“When Arbitrum introduced its token, Plutus swiftly seized the opportunity. The network encountered difficulties handling the surge of users seeking to claim tokens simultaneously, prompting Plutus to establish its own external app page for users to claim through.”

We had an external app page setup for claiming prior to the airdrop that had been prepared for launch over the weeks leading up to the airdrop. It was not created as a reaction to the network surge. This page was created as a courtesy for Plutus users who were interested in converting to plsARB, as a reaction to the surge and people being unable to claim through Arbitrums native airdrop claim page our page was disseminated on Twitter.

“Additionally, Plutus introduced its wrapped version of $ARB, namely $plsARB. Details about plsARB remain scarce, including how its value will accrue and how the Plutus team will utilize user voting power in governance, among other aspects.”

We have clearly stated in our Discord that we are preparing a proposal that will introduce native value accrual to the ARB token and thus directly benefit the entire Arbitrum ecosystem, plsARB and all ARB token holders. In addition, sequencer fee distribution has been long talked about as a potential value accrual mechanism for the ARB token, even being discussed before the token itself was released. We’ve also made it abundantly clear that the voting power of all assets will be transferred to bPLS holders. Until then we will vote in the best interest of Plutus. Once bPLS governance goes live users will have the ability to put forth a proposal that disbands or changes the mechanics around plsARB.

“In the course of the airdrop claiming process, Plutus enabled users to “stake” their ARB tokens for immediate conversion to plsARB. No warnings or disclaimers were provided about the irreversible nature of this process (although the site has been updated since, there are several screenshots captured during the original airdrop that prove it, I will allow the community to validate these claims too).”

Users had the option to only “Claim” their airdrop as well as the option to claim and convert to plsARB with ample disclaimers - with even more added after taking in initial feedback. These were two distinctly different functions as can be seen in the image below. Key to note that 7.5M ARB were added after the additional disclaimers were added.

“Users were enticed with appealing rewards for converting their tokens, without any indication that this would result in irreversible locking. This manoeuvre allowed Plutus to lock more than 10 million $ARB tokens. Plutus has not taken steps to introduce any form of community voting on Arbitrum proposals.

The fact that converting in to plsAssets is irreversible is detailed both in our docs and on the plsARB Convert UI, as seen in the images below.

“Consequently, Plutus retains full control over the allocation of the 12 million ARB tokens. It’s worth noting that Plutus has ‘used’ 45% of their DAO airdrop, predominantly to compensate the team.”

This is patently false - all the 10 million ARB that have been converted to plsARB are in a smart contract, and will be max-locked for ARB staking or another similar mechanism once it’s live. This mechanism is identical to any other plsAsset.

As for the DAO airdrop, Plutus has not used 45% of the DAO airdrop to compensate the team. Plutus has used 18% to compensate the team, with the majority of the DAO airdrop going to incentivize platform use. Most recently Plutus used 300K ARB to buy back plsARB from the official plsARB/ARB LP to distribute to lockers. This is all confirmable on-chain.

“Presently, Plutus started liquidity for plsARB, but the token is trading at a 65% discount compared to ARB. The team has decreased incentives for plsARB holders and has continually offered new assurances about making users whole. Users have incurred substantial losses while the Plutus team has amassed voting power. The team has yet to clarify its internal governance process. Users have no say in how Plutus votes with tokens that aren’t theres.”

The reward structure was clearly laid out prior to plsARB being introduced in launch materials. Plutus does not - and has never guaranteed - that plsAssets will trade at a 1:1 peg. This has been always readily available in our documentation.


As someone who believes in the importance of being open to new ideas and experimentation, I find this proposal both intriguing and promising. The planned staking mechanism could offer significant benefits for long-term ARB token holders, creating a positive feedback loop for those involved in Arbitrum.

The innovative nature of this proposal is particularly appealing. It acknowledges the current gaps in knowledge around sustainable staking mechanisms and suggests a structured way to gather the necessary data to address those. The 12-month experimental phase seems a well-thought-out approach to collect specific and relevant data, which will aid in refining the staking model, ultimately leading to a more stable incentive system.

I view the involvement of the Arbitrum Coalition as another notable element that brings credence to this venture. I would lean on the expertise of Gauntlet, Blockworks, and Trail of Bits to help me understand the long term ramifications of this change.

All in all, I am eager to see how this initiative unfolds and am prepared to support this measured yet forward-thinking approach. This proposal aligns with the spirit of exploration that is among Arbitrum DAO’s best qualities.


We at Layer3 are in full support of the proposed ARB staking activation. It’s evident that thorough consideration has been given to community feedback, especially with decisions such as forgoing the token mint and focusing on treasury funding for staking.

The involvement of the ‘Arbitrum Coalition’ in monitoring the staking mechanism’s impact over a year promises informed refinements in the future.

The proposal’s approach to utilize trial and data-driven insights to optimize ARB staking aligns perfectly with the DAO’s innovative spirit. We’re excited to see the positive impacts this will bring to the Arbitrum ecosystem.


Hey all,

Lets keep all discussion focused on the proposal and not the authors. Activating ARB staking is a large topic that deserves extensive discussion. We will moderate along these lines.


I’m in favour of supporting an ARB staking mechanism, Plutus have been on Arbitrum since the beginning and in my opinion have the best interests of the chain in mind. I echo @krst thoughts around starting with a pilot version then iterating from there!