This proposal is indeed impressive, and Arbitrum would benefit greatly from its integration.
Regarding ARB incentives, it would be beneficial to clarify how they are distributed. One suggestion is to allocate ARB incentives to BUIDL holders and stream them as an additional reward. This could involve streaming ARB tokens directly into the BUIDL token wallets.
Creating a BUIDL/USDC pool sounds intriguing, especially if KYC is required at principal redemption, but users are granted the freedom to interact otherwise.
Another interesting aspect could be the development of a risk underwriting engine. This could involve building an Active Validated Service (AVS) to underwrite risks and implement slashing mechanisms if any outlined conditions are unmet. I think this could even include Objective Slashing, where we could underwrite the risks of Circle’s secondary market BUIDL/USDC.
“BUIDL shareholders may also engage directly with Circle in a secondary market transaction to transfer their BUIDL position to Circle in exchange for USDC, in which a smart contract that facilitates a 1:1 atomic swap of BUIDL for USDC”