The @SEEDLatam delegation has decided to vote AGAINST this proposal at the Temperature Check.
Rationale
After reading the entire proposal and all the debate it has generated, we have decided to vote against it for the following reasons:
- We believe that 12 months for an experimental proposal is too long. Perhaps it should be reduced to 6 or 3 months and iterated upon as some results are measured.
- 1% of the Circulating Supply is a high amount to offer as a stake incentive.
- We agree with @Michigan_Blockchain that a minimum APR of 7.8% for users to accumulate the tokens passively will likely attract nearly all token holders. This will result in a loss of liquidity for $ARB across all exchanges and diminish its use as collateral in monetary markets. It is counterproductive to the goal of driving network and ecosystem growth as voted in the STIP incentives.
- As @pedrob mentions, there should be some pre-established metrics that this proposal aims to achieve. We would also like to see metrics from other staking programs with different governance tokens, listing the pros and cons.
- We also don’t think that adding staking to increase token inflation would add ‘utility’ to Arbitrum’s token.
- There are several legal risks and complexities associated with a staking program, which may inadvertently transform ARB staking into an investment contract. It is important to distinguish between staking for the purpose of validating or securing a network and staking solely to receive a financial return.
Conclusions
We’re always down to explore new ways to add utility to Arbitrum’s token, but we simply don’t think that this proposal would achieve that goal. Plus, it needs more detail and a clearer definition of the objectives it seeks to achieve. Lastly, for an experimental proposal, the time and amount involved are quite significant. We also believe we can innovate with more than just staking the ARB token.