Proposal: Distribution of DAO Revenue to ARB Token Holders
Objective: To distribute a portion of the accumulated revenue from the Arbitrum DAO to ARB token holders. This will align community incentives and give ARB a purpose beyond a "worthless governance token".
Details:
Benefits:
Implementation:
Conclusion:
Distributing DAO revenue to ARB token holders is a logical next step for the network, as it aligns community incentives and gives ARB a purpose beyond a "worthless governance token". This initiative sets Arbitrum apart from other ecosystems and showcases our commitment to creating a more equitable and prosperous network for all.
Proposal: Distribution of DAO Revenue to ARB Token Holders
Objective: To distribute a portion of the accumulated revenue from the Arbitrum DAO to ARB token holders. This will align community incentives and give ARB a purpose beyond a "worthless governance token".
Details:
Benefits:
Implementation:
Conclusion:
Distributing DAO revenue to ARB token holders is a logical next step for the network, as it aligns community incentives and gives ARB a purpose beyond a "worthless governance token". This initiative sets Arbitrum apart from other ecosystems and showcases our commitment to creating a more equitable and prosperous network for all.
Let’s make this proposal live again guys. Because ARB token is the most terrible token on the crypto market. If we won’t do something, arb is going to dead. Lately, every of L2 shows strength, except ARB. Community has no idea what are you doing guys. What are you no worries about your token? You want just make cashout or something like? Do something for ARB token!!!
very great idea :star_struck: :blue_heart: :orange_heart: agree 100%
I support this proposal
Hi, would be great if the Arbitrum community can have more details about the proposed distribution of DAO revenue to ARB token holders covering the matters below.
(1) The significance of aligning community incentives and giving ARB token a real purpose in furthering the goals and objectives of the Arbitrum ecosystem.
Hi, would be great if the Arbitrum community can have more details about the proposed distribution of DAO revenue to ARB token holders covering the matters below.
(1) The significance of aligning community incentives and giving ARB token a real purpose in furthering the goals and objectives of the Arbitrum ecosystem.
(2) The details on the percentage of DAO revenue to be distributed state such as whether it's a fixed percentage or if the rate will vary based on factors whereby in the case of the latter, some examples of the relevant factors.
(3) The manner in which the delegation of ARB tokens will be done and how users can participate in the process to inform token-holders interested in taking part.
(4) The brief details of the distribution mechanism which could include some technical details without being overly complex to help community members understand the distribution process.
(5) The pertinent legal and compliance considerations as the proposed distributions entail financial incentives.
Looking forward to some information on the above.
Cheers.
great ... :heart: :+1: :rose: :rose: that’s a great offer
I support this proposal.
I support this proposal.
Super helpful to read this, thanks for sharing
Yes this is good but if the snapshot can be taken again or prolong for more time to give people other time to vote and participate. This will also give people opportunity to buy the token more before the new bullrun circle. Thank you
I would suggest giving a percentage to current ARB holders/stakers and the remaining percentage going to active participants of the Arbitrum network like the airdrop. This time, the airdrop farmers' wallets will not be included and the distribution will be more fair. Arbitrum is one of my favorite chains because of the fast txn's and reasonable fees. The fees could come down a little with competition coming from all the new Layer 2's such as Polygon zkEVM and opBNB.
I have no voting power even when I have been holding the arb token.. any help on this?
I actually don't think this is the right way forward. I think the ARB foundation should rather use the generated fees for the further development of the protocol. A bit like the Amazon way - grow and now re-invest any profits, and then later on only start to distribute profits to "shareholders".
Nice call. Thanks for sharing. Totally agree with Vesta team
That's a great idea. We can give the user an option to use ARB as a gas token instead of eth. I don't know how it should be done on a technical level or the implications of these decisions on the ARB token. "Food for thought!!!!!!!" we can build some kind of a paymaster......!!!!.
taxes smaxes. do we really care? lol
Let’s make this proposal live again guys. Because ARB token is the most terrible token on the crypto market. If we won’t do something, arb is going to dead. Lately, every of L2 shows strength, except ARB. Community has no idea what are you doing guys. What are you no worries about your token? You want just make cashout or something like? Do something for ARB token!!!
very great idea :star_struck: :blue_heart: :orange_heart: agree 100%
I support this proposal
Hi, would be great if the Arbitrum community can have more details about the proposed distribution of DAO revenue to ARB token holders covering the matters below.
(1) The significance of aligning community incentives and giving ARB token a real purpose in furthering the goals and objectives of the Arbitrum ecosystem.
Hi, would be great if the Arbitrum community can have more details about the proposed distribution of DAO revenue to ARB token holders covering the matters below.
(1) The significance of aligning community incentives and giving ARB token a real purpose in furthering the goals and objectives of the Arbitrum ecosystem.
(2) The details on the percentage of DAO revenue to be distributed state such as whether it's a fixed percentage or if the rate will vary based on factors whereby in the case of the latter, some examples of the relevant factors.
(3) The manner in which the delegation of ARB tokens will be done and how users can participate in the process to inform token-holders interested in taking part.
(4) The brief details of the distribution mechanism which could include some technical details without being overly complex to help community members understand the distribution process.
(5) The pertinent legal and compliance considerations as the proposed distributions entail financial incentives.
Looking forward to some information on the above.
Cheers.
great ... :heart: :+1: :rose: :rose: that’s a great offer
I support this proposal.
I support this proposal.
Super helpful to read this, thanks for sharing
Yes this is good but if the snapshot can be taken again or prolong for more time to give people other time to vote and participate. This will also give people opportunity to buy the token more before the new bullrun circle. Thank you
I would suggest giving a percentage to current ARB holders/stakers and the remaining percentage going to active participants of the Arbitrum network like the airdrop. This time, the airdrop farmers' wallets will not be included and the distribution will be more fair. Arbitrum is one of my favorite chains because of the fast txn's and reasonable fees. The fees could come down a little with competition coming from all the new Layer 2's such as Polygon zkEVM and opBNB.
I have no voting power even when I have been holding the arb token.. any help on this?
I actually don't think this is the right way forward. I think the ARB foundation should rather use the generated fees for the further development of the protocol. A bit like the Amazon way - grow and now re-invest any profits, and then later on only start to distribute profits to "shareholders".
Nice call. Thanks for sharing. Totally agree with Vesta team
That's a great idea. We can give the user an option to use ARB as a gas token instead of eth. I don't know how it should be done on a technical level or the implications of these decisions on the ARB token. "Food for thought!!!!!!!" we can build some kind of a paymaster......!!!!.
taxes smaxes. do we really care? lol
A great article by @Hasu https://uncommoncore.co/a-new-mental-model-for-defi-treasuries/. It should help us to think forward about this topic. I think this is not the right time to think about distributing Dao revenue. I think that the protocol is still in its infancy and the competition for layer 2 is still high, hence that Dao should focus on using the revenue for further protocol development and for future projects.
Whilst the idea to reward ARB holders seem nice. Have we considered the move from a regulatory standpoint? As we all know, regulators have started going after DAOs, and doing this may make us an easy target.
Besides, a direct distribution may turn out to favor only whale holders. Where does this place small time players?
wow it's been 4 months since the proposal was suggested nothing is moving here
I only see sense in it if it were applied to the tokens that are delegates, in the same way I would not support this proposal, since I do not see it as an attractive incentive for any effort to alienate incentives.
To think that it would feel like it's going to the short-term extent.
Can ARB be more useful as a layer-2 chain gas coin like matic
While we understand that such a move might seem advantageous for ARB holders in the short term, we believe there are more impactful ways to utilize those ETH for the benefit of the entire Arbitrum ecosystem.
In contrast to traditional startups that typically reinvest their initial revenues, the circumstances may differ for crypto projects like Arbitrum. Arbitrum, for instance, operates with an inflationary token supply, which necessitates addressing this issue at some stage. Nevertheless, we are of the opinion that reinvestment is the most favorable long-term approach. Here are a few factors that, in our perspective, could bring benefits to the project:
While we understand that such a move might seem advantageous for ARB holders in the short term, we believe there are more impactful ways to utilize those ETH for the benefit of the entire Arbitrum ecosystem.
In contrast to traditional startups that typically reinvest their initial revenues, the circumstances may differ for crypto projects like Arbitrum. Arbitrum, for instance, operates with an inflationary token supply, which necessitates addressing this issue at some stage. Nevertheless, we are of the opinion that reinvestment is the most favorable long-term approach. Here are a few factors that, in our perspective, could bring benefits to the project:
DAOs that were already implemented before the airdrop have received a fair share of ARB to incentivize their growth. However, attracting even more innovation to Arbitrum requires a strategic approach, one that involves grants and funding initiatives. In our opinion, establishing a well-designed grants program, specifically targeted towards highly innovative DeFi products or projects would yield greater benefits for Arbitrum as a whole.
A grants program with clear goals and guidelines, coupled with strict restrictions and effective oversight, has the potential to attract top-notch talent and foster developments within the ecosystem. By channelling the ETH funds into such a program, we could encourage innovation on Arbitrum, ultimately strengthening its position in the L2 environment.
Additionally, those revenues may also be used towards subsidizing Chainlink services, bug bounties or audits for the ecosystem. This could greatly enhance the credibility and reputation of Arbitrum as a whole while improving the user experiences of Arbinauts interacting with protocols benefiting from those services.
Vesta
I like this alot too! keep up the good work
Very much agree, for people who are not 100% into crypto and luckily they are here, it encourages holding the tokens and not just playing speculator
That's good, but from the first sentences you can pause and ask the important question. Who will pay ? Different question, who can ensure the income, if already Arbitrum is not a classic project but rather a 2nd layer of L2 of Ethereum ? There must be income to pay the holders of the ARB token. Don't tell me about the exchange costs, since each exchanger already has their own distribution of costs. And then to the second question, who will insure for the liability of the taxable tax ? Because, what you are explaining will be to change into a corporate action token. It will no longer be an economic token, there will be a dividend collected just in holding the token. This is already being regulated more and more in countries around the world.
agree! ARB should catch vaule!
I also support this proposal.
@sneddles in terms of regulation, is there a difference in whether we will distribute ARB as grants to Arbitrum projects or distribute some ARB between current ARB holders as share of revenue?
To address concerns that revenue distribution may result in $arb being a security, I suggest that the dao direct a portion of revenue in eth to arb-weth liquidity provider in 80-20 Balancer pool like what Radiant is doing.
In this case, the dao is just paying liquidity provider for a service and it shouldn't result in $arb being a security.
A great article by @Hasu https://uncommoncore.co/a-new-mental-model-for-defi-treasuries/. It should help us to think forward about this topic. I think this is not the right time to think about distributing Dao revenue. I think that the protocol is still in its infancy and the competition for layer 2 is still high, hence that Dao should focus on using the revenue for further protocol development and for future projects.
Whilst the idea to reward ARB holders seem nice. Have we considered the move from a regulatory standpoint? As we all know, regulators have started going after DAOs, and doing this may make us an easy target.
Besides, a direct distribution may turn out to favor only whale holders. Where does this place small time players?
wow it's been 4 months since the proposal was suggested nothing is moving here
I only see sense in it if it were applied to the tokens that are delegates, in the same way I would not support this proposal, since I do not see it as an attractive incentive for any effort to alienate incentives.
To think that it would feel like it's going to the short-term extent.
Can ARB be more useful as a layer-2 chain gas coin like matic
While we understand that such a move might seem advantageous for ARB holders in the short term, we believe there are more impactful ways to utilize those ETH for the benefit of the entire Arbitrum ecosystem.
In contrast to traditional startups that typically reinvest their initial revenues, the circumstances may differ for crypto projects like Arbitrum. Arbitrum, for instance, operates with an inflationary token supply, which necessitates addressing this issue at some stage. Nevertheless, we are of the opinion that reinvestment is the most favorable long-term approach. Here are a few factors that, in our perspective, could bring benefits to the project:
While we understand that such a move might seem advantageous for ARB holders in the short term, we believe there are more impactful ways to utilize those ETH for the benefit of the entire Arbitrum ecosystem.
In contrast to traditional startups that typically reinvest their initial revenues, the circumstances may differ for crypto projects like Arbitrum. Arbitrum, for instance, operates with an inflationary token supply, which necessitates addressing this issue at some stage. Nevertheless, we are of the opinion that reinvestment is the most favorable long-term approach. Here are a few factors that, in our perspective, could bring benefits to the project:
DAOs that were already implemented before the airdrop have received a fair share of ARB to incentivize their growth. However, attracting even more innovation to Arbitrum requires a strategic approach, one that involves grants and funding initiatives. In our opinion, establishing a well-designed grants program, specifically targeted towards highly innovative DeFi products or projects would yield greater benefits for Arbitrum as a whole.
A grants program with clear goals and guidelines, coupled with strict restrictions and effective oversight, has the potential to attract top-notch talent and foster developments within the ecosystem. By channelling the ETH funds into such a program, we could encourage innovation on Arbitrum, ultimately strengthening its position in the L2 environment.
Additionally, those revenues may also be used towards subsidizing Chainlink services, bug bounties or audits for the ecosystem. This could greatly enhance the credibility and reputation of Arbitrum as a whole while improving the user experiences of Arbinauts interacting with protocols benefiting from those services.
Vesta
I like this alot too! keep up the good work
Very much agree, for people who are not 100% into crypto and luckily they are here, it encourages holding the tokens and not just playing speculator
That's good, but from the first sentences you can pause and ask the important question. Who will pay ? Different question, who can ensure the income, if already Arbitrum is not a classic project but rather a 2nd layer of L2 of Ethereum ? There must be income to pay the holders of the ARB token. Don't tell me about the exchange costs, since each exchanger already has their own distribution of costs. And then to the second question, who will insure for the liability of the taxable tax ? Because, what you are explaining will be to change into a corporate action token. It will no longer be an economic token, there will be a dividend collected just in holding the token. This is already being regulated more and more in countries around the world.
agree! ARB should catch vaule!
I also support this proposal.
@sneddles in terms of regulation, is there a difference in whether we will distribute ARB as grants to Arbitrum projects or distribute some ARB between current ARB holders as share of revenue?
To address concerns that revenue distribution may result in $arb being a security, I suggest that the dao direct a portion of revenue in eth to arb-weth liquidity provider in 80-20 Balancer pool like what Radiant is doing.
In this case, the dao is just paying liquidity provider for a service and it shouldn't result in $arb being a security.
shit proposal :rofl: :rofl: :rofl: :rofl:
I have a few suggestions:
shit proposal :rofl: :rofl: :rofl: :rofl:
I have a few suggestions:
Nice, I support this
good,i'm agree
Objective: To distribute a portion of the accumulated revenue from the Arbitrum DAO to ARB token holders. This will align community incentives and give ARB a purpose beyond a "worthless governance token".
Details:
good,i'm agree
Objective: To distribute a portion of the accumulated revenue from the Arbitrum DAO to ARB token holders. This will align community incentives and give ARB a purpose beyond a "worthless governance token".
Details:
Benefits:
Implementation:
Conclusion:
Distributing DAO revenue to ARB token holders is a logical next step for the network, as it aligns community incentives and gives ARB a purpose beyond a "worthless governance token". This initiative sets Arbitrum apart from other ecosystems and showcases our commitment to creating a more equitable and prosperous network for all.
gooe，i'm agree
Even if this was real, that doesn’t mean that the DAO shouldn’t be compliant.
If it's a DAO it has no one to be compliant with. There's no regulatory oversight on DAOs, that's the point. Network state.
100% agree. I dont't see any reason to against this proposal. Let's vote.
我支持这个提议
> Blockquote
I support this proposal.
I suggest that this revenue goes to the DAO treasury which can be spent on growth experiments
We have $3.9 billion in the treasury already we aren't struggling for funds
we have the power to change where the revenue is directed if its needed
While distributing to ARB holders could be a positive short term return for HODLers, over the long term this does not help the ecosystem
I suggest that this revenue goes to the DAO treasury which can be spent on growth experiments
We have $3.9 billion in the treasury already we aren't struggling for funds
we have the power to change where the revenue is directed if its needed
While distributing to ARB holders could be a positive short term return for HODLers, over the long term this does not help the ecosystem
Id argue its the opposite, short term the revenue is very low but long terms it connects the success of the chain to the value of ARB. If the chain is successful it increases the value of our treasury
Totally agree it! Let $ARB Empower. Because we are number one, we have the strongest community and ecology, so please accept this offer and make the ecology stronger!
It’s illegal.
everything about arbitrum is already illegal
It’s illegal.
everything about arbitrum is already illegal
Whether something does or doesn't pay a dividend is not the deciding factor for what is a security otherwise amazon stock and all non dividend paying stocks would not be considered one but they are. We already qualify as an illegally unregistered security, the fact we are even able to vote on having revenue paid to token holders is enough to close the case.
From a practical point of view, I think the monetization of the token would lead to unexpected and undesirable secondary effects. Organizations would accumulate tokens with the desire to maximize their extraction from the system. Short term thinking would minimize investment to R&D, expansion, building more stuff, and instead maximize extraction. The organization would fall prey to nefarious actors which would scare aware large scale infrastructure projects that would seek to build on Arbitrum, thus reducing the long term value proposition of Arbitrum for teams, and accelerate short term extraction.
Our main source of funds for funding projects in the ecosystem is the ARB treasury, it will take many years for revenue to even come close to the current $ value in ARB tokens we control.
That ARB only has value if we put value back into it and give investors a reason to invest in the project. If buyers stop buying ARB we have a treasury value of $0. You can't reasonable expect (over the long term) the market to highly value a socialist project that only gives out money to people for no financial return.
Nice, I support this
good,i'm agree
Objective: To distribute a portion of the accumulated revenue from the Arbitrum DAO to ARB token holders. This will align community incentives and give ARB a purpose beyond a "worthless governance token".
Details:
good,i'm agree
Objective: To distribute a portion of the accumulated revenue from the Arbitrum DAO to ARB token holders. This will align community incentives and give ARB a purpose beyond a "worthless governance token".
Details:
Benefits:
Implementation:
Conclusion:
Distributing DAO revenue to ARB token holders is a logical next step for the network, as it aligns community incentives and gives ARB a purpose beyond a "worthless governance token". This initiative sets Arbitrum apart from other ecosystems and showcases our commitment to creating a more equitable and prosperous network for all.
gooe，i'm agree
Even if this was real, that doesn’t mean that the DAO shouldn’t be compliant.
If it's a DAO it has no one to be compliant with. There's no regulatory oversight on DAOs, that's the point. Network state.
100% agree. I dont't see any reason to against this proposal. Let's vote.
我支持这个提议
> Blockquote
I support this proposal.
I suggest that this revenue goes to the DAO treasury which can be spent on growth experiments
We have $3.9 billion in the treasury already we aren't struggling for funds
we have the power to change where the revenue is directed if its needed
While distributing to ARB holders could be a positive short term return for HODLers, over the long term this does not help the ecosystem
I suggest that this revenue goes to the DAO treasury which can be spent on growth experiments
We have $3.9 billion in the treasury already we aren't struggling for funds
we have the power to change where the revenue is directed if its needed
While distributing to ARB holders could be a positive short term return for HODLers, over the long term this does not help the ecosystem
Id argue its the opposite, short term the revenue is very low but long terms it connects the success of the chain to the value of ARB. If the chain is successful it increases the value of our treasury
Totally agree it! Let $ARB Empower. Because we are number one, we have the strongest community and ecology, so please accept this offer and make the ecology stronger!
It’s illegal.
everything about arbitrum is already illegal
It’s illegal.
everything about arbitrum is already illegal
Whether something does or doesn't pay a dividend is not the deciding factor for what is a security otherwise amazon stock and all non dividend paying stocks would not be considered one but they are. We already qualify as an illegally unregistered security, the fact we are even able to vote on having revenue paid to token holders is enough to close the case.
From a practical point of view, I think the monetization of the token would lead to unexpected and undesirable secondary effects. Organizations would accumulate tokens with the desire to maximize their extraction from the system. Short term thinking would minimize investment to R&D, expansion, building more stuff, and instead maximize extraction. The organization would fall prey to nefarious actors which would scare aware large scale infrastructure projects that would seek to build on Arbitrum, thus reducing the long term value proposition of Arbitrum for teams, and accelerate short term extraction.
Our main source of funds for funding projects in the ecosystem is the ARB treasury, it will take many years for revenue to even come close to the current $ value in ARB tokens we control.
That ARB only has value if we put value back into it and give investors a reason to invest in the project. If buyers stop buying ARB we have a treasury value of $0. You can't reasonable expect (over the long term) the market to highly value a socialist project that only gives out money to people for no financial return.
отличная идея ! поддерживаю
100% in agreement! If ARB has no backing value, it's going to plummet to $0. A governance token worth $0 poses a threat to governance security.
that's a great offer
[image]
Good snew, ARB to the moon soon
yes i agree
Objective: To distribute a portion of the accumulated revenue from the Arbitrum DAO to ARB token holders. This will align community incentives and give ARB a purpose beyond a "worthless governance token".
Details:
yes i agree
Objective: To distribute a portion of the accumulated revenue from the Arbitrum DAO to ARB token holders. This will align community incentives and give ARB a purpose beyond a "worthless governance token".
Details:
Benefits:
Implementation:
Conclusion:
Distributing DAO revenue to ARB token holders is a logical next step for the network, as it aligns community incentives and gives ARB a purpose beyond a "worthless governance token". This initiative sets Arbitrum apart from other ecosystems and showcases our commitment to creating a more equitable and prosperous network for all.
Objective: To distribute a portion of the accumulated revenue from the Arbitrum DAO to ARB token holders. This will align community incentives and give ARB a purpose beyond a “worthless governance token”.
Details:
Benefits:
Implementation:
Conclusion:
Distributing DAO revenue to ARB token holders is a logical next step for the network, as it aligns community incentives and gives ARB a purpose beyond a “worthless governance token”. This initiative sets Arbitrum apart from other ecosystems and showcases our commitment to creating a more equitable and prosperous network for all. [/quote]
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i think its good decision for ARB community
:grapes: :grapes: :grapes:支持这个提议 :grinning: :giraffe: :dromedary_camel:奖励 ARB 持有者的完美机制
I support this proposal.
i agree with you 100%.
I agree,this is a good thing, it makes those who hold arb tokens more confident and motivated.
This is a great proposal and should be seriously considered.
The fact that it might be construed as a security is only a concern for American individuals. If you're an institution you can easily hold these tokens offshore.
We should avoid making decisions with global ramifications just based on American legal frameworks.
This is a great proposal and should be seriously considered.
The fact that it might be construed as a security is only a concern for American individuals. If you're an institution you can easily hold these tokens offshore.
We should avoid making decisions with global ramifications just based on American legal frameworks.
Some other ideas for us to consider is for the DAO to do buybacks and burns or enable the feature where ARB can be utilized to fulfill transactions simply by converting the ARB to ETH within a wallet.
I totally support this. There is no governance without shared revenue. Let's do this! As an arb-maxi, I will be voting for this to pass. :saluting_face:
I support this proposal.
With gauge voting, it allows the dao to control reward allocation to LP's -- inturn LP providers offer bribes to get more votes towards their LP.
but a little unsure why we need to complicate this with gauges & stuff when we can just incentivize LPs with more $ARB from the Ecosystem poo
With gauge voting, it allows the dao to control reward allocation to LP's -- inturn LP providers offer bribes to get more votes towards their LP.
but a little unsure why we need to complicate this with gauges & stuff when we can just incentivize LPs with more $ARB from the Ecosystem poo
So this would be a way to do it as a DAO via budget management. To use gauge voting as a way to distribute revenue like a "decentralized bank". Like Curve Finance, you can use gauges with voting for pool rewards management -- but can be used for dao budgets, foundations, grants ect.
Also important that liquidity providers have some way to represent their needs with governance/revenue decisions without having to unstake/withdraw from pool. This is why pool bribes work well at giving LP providers what they mostly want, without having to pull liquidity to make the snapshot and vote for what they want.
Maybe we take this into two stages:
отличная идея ! поддерживаю
100% in agreement! If ARB has no backing value, it's going to plummet to $0. A governance token worth $0 poses a threat to governance security.
that's a great offer
[image]
Good snew, ARB to the moon soon
yes i agree
Objective: To distribute a portion of the accumulated revenue from the Arbitrum DAO to ARB token holders. This will align community incentives and give ARB a purpose beyond a "worthless governance token".
Details:
yes i agree
Objective: To distribute a portion of the accumulated revenue from the Arbitrum DAO to ARB token holders. This will align community incentives and give ARB a purpose beyond a "worthless governance token".
Details:
Benefits:
Implementation:
Conclusion:
Distributing DAO revenue to ARB token holders is a logical next step for the network, as it aligns community incentives and gives ARB a purpose beyond a "worthless governance token". This initiative sets Arbitrum apart from other ecosystems and showcases our commitment to creating a more equitable and prosperous network for all.
Objective: To distribute a portion of the accumulated revenue from the Arbitrum DAO to ARB token holders. This will align community incentives and give ARB a purpose beyond a “worthless governance token”.
Details:
Benefits:
Implementation:
Conclusion:
Distributing DAO revenue to ARB token holders is a logical next step for the network, as it aligns community incentives and gives ARB a purpose beyond a “worthless governance token”. This initiative sets Arbitrum apart from other ecosystems and showcases our commitment to creating a more equitable and prosperous network for all. [/quote]
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i think its good decision for ARB community
:grapes: :grapes: :grapes:支持这个提议 :grinning: :giraffe: :dromedary_camel:奖励 ARB 持有者的完美机制
I support this proposal.
i agree with you 100%.
I agree,this is a good thing, it makes those who hold arb tokens more confident and motivated.
This is a great proposal and should be seriously considered.
The fact that it might be construed as a security is only a concern for American individuals. If you're an institution you can easily hold these tokens offshore.
We should avoid making decisions with global ramifications just based on American legal frameworks.
This is a great proposal and should be seriously considered.
The fact that it might be construed as a security is only a concern for American individuals. If you're an institution you can easily hold these tokens offshore.
We should avoid making decisions with global ramifications just based on American legal frameworks.
Some other ideas for us to consider is for the DAO to do buybacks and burns or enable the feature where ARB can be utilized to fulfill transactions simply by converting the ARB to ETH within a wallet.
I totally support this. There is no governance without shared revenue. Let's do this! As an arb-maxi, I will be voting for this to pass. :saluting_face:
I support this proposal.
With gauge voting, it allows the dao to control reward allocation to LP's -- inturn LP providers offer bribes to get more votes towards their LP.
but a little unsure why we need to complicate this with gauges & stuff when we can just incentivize LPs with more $ARB from the Ecosystem poo
With gauge voting, it allows the dao to control reward allocation to LP's -- inturn LP providers offer bribes to get more votes towards their LP.
but a little unsure why we need to complicate this with gauges & stuff when we can just incentivize LPs with more $ARB from the Ecosystem poo
So this would be a way to do it as a DAO via budget management. To use gauge voting as a way to distribute revenue like a "decentralized bank". Like Curve Finance, you can use gauges with voting for pool rewards management -- but can be used for dao budgets, foundations, grants ect.
Also important that liquidity providers have some way to represent their needs with governance/revenue decisions without having to unstake/withdraw from pool. This is why pool bribes work well at giving LP providers what they mostly want, without having to pull liquidity to make the snapshot and vote for what they want.
Maybe we take this into two stages:
I get that, and I have nothing against LPers, but a little unsure why we need to complicate this with gauges & stuff when we can just incentivize LPs with more $ARB from the Ecosystem pool if it comes to that. Besides, I don't expect sequencer revenue to be huge, probs low single digit % at max, so not sure how much will be there to argue over lol.
It's a good idea, definitely worth exploring further. Would need to run some numbers to see if it's worth the extra mechanics tho.
Distributing sequencer revenue to delegators will provide an incentive to governance holders (which currently they have none, price speculation aside) and create a revenue marketplace where the LP APR and sequencer APR will compete and balance each other over time.
Distributing sequencer revenue to delegators will provide an incentive to governance holders (which currently they have none, price speculation aside) and create a revenue marketplace where the LP APR and sequencer APR will compete and balance each other over time.
This is what having pool gauges does for distributing revenue; it creates a marketplace between value of voter and value of liquidity provider in the ecosystem -- done through bribes and gauge voting.
I support this one, sounds really great
100% agree. ARB holders need an extra incentive to hold tokens.
You could also use a pool gauge voting system to distribute revenue to other dao’s/foundations.
You could also use a pool gauge voting system to distribute revenue to other dao’s/foundations.
Would be a strange thing to have after loaning 50m ARB to Wintermute.
The reasoning here is a bit counter-productive though -- APR will tend to decrease as a pool matures and grows in liquidity, while this contrasts to opting out of revenue from distribution to delegated supply. Basically to exclude LP's from share/revenue of protocol fees would find an equilibrium between ROI of delegating and providing liquidity; as both directly derive from tx volume. In this way you have a financial incentive that conflicts with governance participation.
Would be better to use a pool gauge voting system for distributing revenue to LP's -- this way liquidity providers can bribe voters to allocate more revenue back to preferred LP's.
I think the liquidity is quite deep basically everywhere. Might be a consideration if things start to get "wicky" but overall I don't think liquidity bootstrapping is a challenge at this point in time.
Would be a strange thing to have after loaning 50m ARB to Wintermute.
O like this, only we need to SEE all de process ando is a good idea
Should also use some of the revenue to redirect to liquidity providers -- this can be done with a pool gauge system.
You could also use a pool gauge voting system to distribute revenue to other dao's/foundations.
Now we talking. Gives holders actual incentive to hold.
I agree. This is a complex topic that should be discussed in detail with entire community and some actual legal & financial experts involved to ensure a safe, valuable & sustainable path forward.
I don't think focusing on the current revenue is important, that number changes literally every passing minute. What's important is to ensure a reasonable path forward for the utilization of that revenue, be it distribution to holders/stakers, reinvestment into the ecosystem, buybacks, or any combination of these.
I agree. This is a complex topic that should be discussed in detail with entire community and some actual legal & financial experts involved to ensure a safe, valuable & sustainable path forward.
I don't think focusing on the current revenue is important, that number changes literally every passing minute. What's important is to ensure a reasonable path forward for the utilization of that revenue, be it distribution to holders/stakers, reinvestment into the ecosystem, buybacks, or any combination of these.
I believe @Westie was quite interested in this discussion in an older thread, so perhaps a good start to pull him in for suggestions/thoughts.
Delegates represent the community, and entities like @BlockworksResearch and @PlutusDAO invest a lot of resources & thought while engaging with proposals. Someone should compensate them for their time.
Whether they vote for or against a proposal should have ZERO impact on their revenue, what matters is participation. They can vote against each & every proposal for all I care as long as they have a rational opinion and a valid suggestion to back their vote.
I don't agree. As things are at the moment, $ARB holders have two choices:
I don't agree. As things are at the moment, $ARB holders have two choices:
It's one or the other. Active governance participation has an opportunity cost at the moment. Distributing sequencer revenue to delegators will provide an incentive to governance holders (which currently they have none, price speculation aside) and create a revenue marketplace where the LP APR and sequencer APR will compete and balance each other over time.
thanks for the well thought-out response, i agree with your points but just wanted to add to this
Additionally, $8M is probably not a substantial enough sum of money to return to token holders. 166.93M ARB is currently delegated. That means less than 5c in ETH per ARB, assuming no more tokens get delegated, which they would if something like this passes given over 1b are in circulation. Assuming the number of ARB delegate reaches half of the circulating supply, this would mean 1.25 cents per arb.
thanks for the well thought-out response, i agree with your points but just wanted to add to this
Additionally, $8M is probably not a substantial enough sum of money to return to token holders. 166.93M ARB is currently delegated. That means less than 5c in ETH per ARB, assuming no more tokens get delegated, which they would if something like this passes given over 1b are in circulation. Assuming the number of ARB delegate reaches half of the circulating supply, this would mean 1.25 cents per arb.
A 1% "dividend" is not so insignificant imo but more importantly it sends out a strong message. We don't have the credibility of the stock market so the number one question that gets brought up when talking about ARB is "why would i hold a governance token?", even if they're bullish on the network. Doing revenue sharing straightens out the incentives and allows people to invest in the network if they expect transaction volume to increase in the future.
Which is what we want because at the end of the day, its investors buying ARB that give us our huge treasury balance allowing us to fund ecosystem improvements.
I have always wondered how the DAO could incentivize governance participation. It seems unfair to expect
I have always wondered how the DAO could incentivize governance participation. It seems unfair to expect
Even if we set aside the distribution to ARB token holders matter, what would be the use case for this revenue? Especially considering the DAO already has 700m ARB earmarked for operational & ecosystem growth purposes? Perhaps its better to discuss and get clarity on current plans for this revenue before figuring out if/how to give it to ARB holders.
Lets do it! More incentive to invest and thrive on Arbitrum.
"ARB holders will need to claim." So, I just heard about this via this article https://cointelegraph.com/news/arbitrum-s-dao-to-receive-over-3-350-eth-revenue-from-transaction-fees which referenced this tweet https://twitter.com/arbitrum/status/1656090360119017472 . The article says that this proposal states: ""Only delegated ARB tokens will be eligible for revenue distribution, and holders must claim their rewards."
Agreed with this. This conversation needs to start happening as soon as possible.
Love it! Let's make sure the rewards go through mechanism of users stake > earn rewards. This is solely for tax purposes. If it were airdropped, it is taxed upon receipt at full value and then again at sale. If it is given for staking, it's earned as interest income. The latter being much more favorable from a tax perspective.
agree 100%. An indirect POS mechanism if you will!
thanks for the feedback
i think the ship has already sailed on the regulatory nightmare stuff. Arbitrum team already runs a centralised sequencer and doesn't comply with AML or any other law that most probably applies.
thanks for the feedback
i think the ship has already sailed on the regulatory nightmare stuff. Arbitrum team already runs a centralised sequencer and doesn't comply with AML or any other law that most probably applies.
why should a DAO/chain act in the interest of 1 countries regulation anyway? I've never heard an Ethereum core dev state regulation as a reason for not adding something that benefits ETH holders financially.
Let’s find a way to direct revenue to the people that create the best value!
yeah lets reward people that create the best value!.. with the massive ARB treasury balance we have.
the more valuable ARB is, the more we can reward! we can't just expect ARB to have a large enough value to let us fund projects if we never put any value back into it.
$ARB first and foremost is a governance token
On the topic of DAO tokens with no value outside of voting, i think Vitalik said it best
"The notion of "governance rights" as a narrative for why a token should be valuable is pathological. You're literally saying "I'm buying $X because later on someone might buy it from me and a bunch of other people to twist the protocol toward their special interests"
As a regular individual, "pay $500 to get a 0.0001% chance to influence the outcome of some votes" is just not a good trade. The only people for whom it is a good trade are multimillionaires and hedge funds (including attackers)."
https://twitter.com/VitalikButerin/status/1597570120456769536?s=20
I get that, and I have nothing against LPers, but a little unsure why we need to complicate this with gauges & stuff when we can just incentivize LPs with more $ARB from the Ecosystem pool if it comes to that. Besides, I don't expect sequencer revenue to be huge, probs low single digit % at max, so not sure how much will be there to argue over lol.
It's a good idea, definitely worth exploring further. Would need to run some numbers to see if it's worth the extra mechanics tho.
Distributing sequencer revenue to delegators will provide an incentive to governance holders (which currently they have none, price speculation aside) and create a revenue marketplace where the LP APR and sequencer APR will compete and balance each other over time.
Distributing sequencer revenue to delegators will provide an incentive to governance holders (which currently they have none, price speculation aside) and create a revenue marketplace where the LP APR and sequencer APR will compete and balance each other over time.
This is what having pool gauges does for distributing revenue; it creates a marketplace between value of voter and value of liquidity provider in the ecosystem -- done through bribes and gauge voting.
I support this one, sounds really great
100% agree. ARB holders need an extra incentive to hold tokens.
You could also use a pool gauge voting system to distribute revenue to other dao’s/foundations.
You could also use a pool gauge voting system to distribute revenue to other dao’s/foundations.
Would be a strange thing to have after loaning 50m ARB to Wintermute.
The reasoning here is a bit counter-productive though -- APR will tend to decrease as a pool matures and grows in liquidity, while this contrasts to opting out of revenue from distribution to delegated supply. Basically to exclude LP's from share/revenue of protocol fees would find an equilibrium between ROI of delegating and providing liquidity; as both directly derive from tx volume. In this way you have a financial incentive that conflicts with governance participation.
Would be better to use a pool gauge voting system for distributing revenue to LP's -- this way liquidity providers can bribe voters to allocate more revenue back to preferred LP's.
I think the liquidity is quite deep basically everywhere. Might be a consideration if things start to get "wicky" but overall I don't think liquidity bootstrapping is a challenge at this point in time.
Would be a strange thing to have after loaning 50m ARB to Wintermute.
O like this, only we need to SEE all de process ando is a good idea
Should also use some of the revenue to redirect to liquidity providers -- this can be done with a pool gauge system.
You could also use a pool gauge voting system to distribute revenue to other dao's/foundations.
Now we talking. Gives holders actual incentive to hold.
I agree. This is a complex topic that should be discussed in detail with entire community and some actual legal & financial experts involved to ensure a safe, valuable & sustainable path forward.
I don't think focusing on the current revenue is important, that number changes literally every passing minute. What's important is to ensure a reasonable path forward for the utilization of that revenue, be it distribution to holders/stakers, reinvestment into the ecosystem, buybacks, or any combination of these.
I agree. This is a complex topic that should be discussed in detail with entire community and some actual legal & financial experts involved to ensure a safe, valuable & sustainable path forward.
I don't think focusing on the current revenue is important, that number changes literally every passing minute. What's important is to ensure a reasonable path forward for the utilization of that revenue, be it distribution to holders/stakers, reinvestment into the ecosystem, buybacks, or any combination of these.
I believe @Westie was quite interested in this discussion in an older thread, so perhaps a good start to pull him in for suggestions/thoughts.
Delegates represent the community, and entities like @BlockworksResearch and @PlutusDAO invest a lot of resources & thought while engaging with proposals. Someone should compensate them for their time.
Whether they vote for or against a proposal should have ZERO impact on their revenue, what matters is participation. They can vote against each & every proposal for all I care as long as they have a rational opinion and a valid suggestion to back their vote.
I don't agree. As things are at the moment, $ARB holders have two choices:
I don't agree. As things are at the moment, $ARB holders have two choices:
It's one or the other. Active governance participation has an opportunity cost at the moment. Distributing sequencer revenue to delegators will provide an incentive to governance holders (which currently they have none, price speculation aside) and create a revenue marketplace where the LP APR and sequencer APR will compete and balance each other over time.
thanks for the well thought-out response, i agree with your points but just wanted to add to this
Additionally, $8M is probably not a substantial enough sum of money to return to token holders. 166.93M ARB is currently delegated. That means less than 5c in ETH per ARB, assuming no more tokens get delegated, which they would if something like this passes given over 1b are in circulation. Assuming the number of ARB delegate reaches half of the circulating supply, this would mean 1.25 cents per arb.
thanks for the well thought-out response, i agree with your points but just wanted to add to this
Additionally, $8M is probably not a substantial enough sum of money to return to token holders. 166.93M ARB is currently delegated. That means less than 5c in ETH per ARB, assuming no more tokens get delegated, which they would if something like this passes given over 1b are in circulation. Assuming the number of ARB delegate reaches half of the circulating supply, this would mean 1.25 cents per arb.
A 1% "dividend" is not so insignificant imo but more importantly it sends out a strong message. We don't have the credibility of the stock market so the number one question that gets brought up when talking about ARB is "why would i hold a governance token?", even if they're bullish on the network. Doing revenue sharing straightens out the incentives and allows people to invest in the network if they expect transaction volume to increase in the future.
Which is what we want because at the end of the day, its investors buying ARB that give us our huge treasury balance allowing us to fund ecosystem improvements.
I have always wondered how the DAO could incentivize governance participation. It seems unfair to expect
I have always wondered how the DAO could incentivize governance participation. It seems unfair to expect
Even if we set aside the distribution to ARB token holders matter, what would be the use case for this revenue? Especially considering the DAO already has 700m ARB earmarked for operational & ecosystem growth purposes? Perhaps its better to discuss and get clarity on current plans for this revenue before figuring out if/how to give it to ARB holders.
Lets do it! More incentive to invest and thrive on Arbitrum.
"ARB holders will need to claim." So, I just heard about this via this article https://cointelegraph.com/news/arbitrum-s-dao-to-receive-over-3-350-eth-revenue-from-transaction-fees which referenced this tweet https://twitter.com/arbitrum/status/1656090360119017472 . The article says that this proposal states: ""Only delegated ARB tokens will be eligible for revenue distribution, and holders must claim their rewards."
Agreed with this. This conversation needs to start happening as soon as possible.
Love it! Let's make sure the rewards go through mechanism of users stake > earn rewards. This is solely for tax purposes. If it were airdropped, it is taxed upon receipt at full value and then again at sale. If it is given for staking, it's earned as interest income. The latter being much more favorable from a tax perspective.
agree 100%. An indirect POS mechanism if you will!
thanks for the feedback
i think the ship has already sailed on the regulatory nightmare stuff. Arbitrum team already runs a centralised sequencer and doesn't comply with AML or any other law that most probably applies.
thanks for the feedback
i think the ship has already sailed on the regulatory nightmare stuff. Arbitrum team already runs a centralised sequencer and doesn't comply with AML or any other law that most probably applies.
why should a DAO/chain act in the interest of 1 countries regulation anyway? I've never heard an Ethereum core dev state regulation as a reason for not adding something that benefits ETH holders financially.
Let’s find a way to direct revenue to the people that create the best value!
yeah lets reward people that create the best value!.. with the massive ARB treasury balance we have.
the more valuable ARB is, the more we can reward! we can't just expect ARB to have a large enough value to let us fund projects if we never put any value back into it.
$ARB first and foremost is a governance token
On the topic of DAO tokens with no value outside of voting, i think Vitalik said it best
"The notion of "governance rights" as a narrative for why a token should be valuable is pathological. You're literally saying "I'm buying $X because later on someone might buy it from me and a bunch of other people to twist the protocol toward their special interests"
As a regular individual, "pay $500 to get a 0.0001% chance to influence the outcome of some votes" is just not a good trade. The only people for whom it is a good trade are multimillionaires and hedge funds (including attackers)."
https://twitter.com/VitalikButerin/status/1597570120456769536?s=20
im against giving a bigger chunk to delegates as it gives a financial incentive for voting on what will be seen a popular and get you more voting power, rather than whats best for the network.
I think this could be good for $ARB holders. But the proposal needs to get into further detail on how this should be done. Only token delegation may not be enough to qualify for a revenue share. Perhaps some sort of lockup or staking format could be explored, further incentivizing governance participation.
Also what about actual delegates? Should they be getting a bigger/smaller chunk of the revenue / $ARB they represent? The math needs to be explored and proposed. Happy to collaborate with someone who has experience in this area.
The perfect mechanism to reward the ARB holders.if it does pass I see no reason to sell at any point in the future..
Makes sense. If governance = ownership, then you should be due a share of the profits. Otherwise what's the point of governing... for fun?
I support this proposal.
I support this proposal. Treasury has already been allocated 42.78% $ARB tokens which can be used to boost the growth of the arbitrum ecosystem. So, incentives for the ecosystem have already been taken care of.
Large no. of $ARB tokens will come into circulation in future, which were allocated to the treasury, DAO, investors, team members. Holders of $ARB token will get diluted. Revenue should be distributed to $ARB holders so that they have other incentives other than governance to hold $ARB tokens.
I support this proposal. Treasury has already been allocated 42.78% $ARB tokens which can be used to boost the growth of the arbitrum ecosystem. So, incentives for the ecosystem have already been taken care of.
Large no. of $ARB tokens will come into circulation in future, which were allocated to the treasury, DAO, investors, team members. Holders of $ARB token will get diluted. Revenue should be distributed to $ARB holders so that they have other incentives other than governance to hold $ARB tokens.
Economic sustainability is very crucial in the long run for blockchains. Only Ethereum & BSC have managed to get close to being sustainable. Revenue distribution will play a key role in Arbitrum's economically sustainablity.
Totally agree with PSY ! Hope we get more views on this proposal !
love the general idea, looking forward the discussion
Sorry for the cynicism, but I think that distribution simply from holding $ARB is going to be extremely inefficient and a regulatory nightmare.
I'm all for the DAO actually owning the revenue they generate, but turning $ARB into a security (owning the token makes you profit off the work from others) is not a good idea. This revenue could be distributed to people providing important services or stakes to the wider ecosystem instead and allow for sustainable growth. This is especially the case because the OP seems to be suggesting to simply distribute the tokens using disperse, leading to a lot of important revenue potentially being lost for little economic benefit.
Sorry for the cynicism, but I think that distribution simply from holding $ARB is going to be extremely inefficient and a regulatory nightmare.
I'm all for the DAO actually owning the revenue they generate, but turning $ARB into a security (owning the token makes you profit off the work from others) is not a good idea. This revenue could be distributed to people providing important services or stakes to the wider ecosystem instead and allow for sustainable growth. This is especially the case because the OP seems to be suggesting to simply distribute the tokens using disperse, leading to a lot of important revenue potentially being lost for little economic benefit.
$ARB first and foremost is a governance token, and its main role is protocol governance and ownership.. Let's find a way to direct revenue to the people that create the best value!
agree 100% with the proposal , Holders of $ARB token will get diluted in future if not
The fact that it might be construed as a security is only a concern for American individuals. If you’re an institution you can easily hold these tokens offshore.
We should avoid making decisions with global ramifications just based on American legal frameworks.
I wish this were the case. The reality is that the US has regulatory power over most of the world. It is why a lot of banks abroad are stingy about accepting people with US citizenship as clients, it opens them up to a lot of paperwork and scrutiny that they wouldn't have from other citizenships. The USD being the global reserve currency means that the US can effectively bar anyone from global trade (at least above board) that they don't like. While there are some agreements to "cut out" the USD, they are usually only bilateral and limited in scope (e.g. Russia and China for oil).
im against giving a bigger chunk to delegates as it gives a financial incentive for voting on what will be seen a popular and get you more voting power, rather than whats best for the network.
I think this could be good for $ARB holders. But the proposal needs to get into further detail on how this should be done. Only token delegation may not be enough to qualify for a revenue share. Perhaps some sort of lockup or staking format could be explored, further incentivizing governance participation.
Also what about actual delegates? Should they be getting a bigger/smaller chunk of the revenue / $ARB they represent? The math needs to be explored and proposed. Happy to collaborate with someone who has experience in this area.
The perfect mechanism to reward the ARB holders.if it does pass I see no reason to sell at any point in the future..
Makes sense. If governance = ownership, then you should be due a share of the profits. Otherwise what's the point of governing... for fun?
I support this proposal.
I support this proposal. Treasury has already been allocated 42.78% $ARB tokens which can be used to boost the growth of the arbitrum ecosystem. So, incentives for the ecosystem have already been taken care of.
Large no. of $ARB tokens will come into circulation in future, which were allocated to the treasury, DAO, investors, team members. Holders of $ARB token will get diluted. Revenue should be distributed to $ARB holders so that they have other incentives other than governance to hold $ARB tokens.
I support this proposal. Treasury has already been allocated 42.78% $ARB tokens which can be used to boost the growth of the arbitrum ecosystem. So, incentives for the ecosystem have already been taken care of.
Large no. of $ARB tokens will come into circulation in future, which were allocated to the treasury, DAO, investors, team members. Holders of $ARB token will get diluted. Revenue should be distributed to $ARB holders so that they have other incentives other than governance to hold $ARB tokens.
Economic sustainability is very crucial in the long run for blockchains. Only Ethereum & BSC have managed to get close to being sustainable. Revenue distribution will play a key role in Arbitrum's economically sustainablity.
Totally agree with PSY ! Hope we get more views on this proposal !
love the general idea, looking forward the discussion
Sorry for the cynicism, but I think that distribution simply from holding $ARB is going to be extremely inefficient and a regulatory nightmare.
I'm all for the DAO actually owning the revenue they generate, but turning $ARB into a security (owning the token makes you profit off the work from others) is not a good idea. This revenue could be distributed to people providing important services or stakes to the wider ecosystem instead and allow for sustainable growth. This is especially the case because the OP seems to be suggesting to simply distribute the tokens using disperse, leading to a lot of important revenue potentially being lost for little economic benefit.
Sorry for the cynicism, but I think that distribution simply from holding $ARB is going to be extremely inefficient and a regulatory nightmare.
I'm all for the DAO actually owning the revenue they generate, but turning $ARB into a security (owning the token makes you profit off the work from others) is not a good idea. This revenue could be distributed to people providing important services or stakes to the wider ecosystem instead and allow for sustainable growth. This is especially the case because the OP seems to be suggesting to simply distribute the tokens using disperse, leading to a lot of important revenue potentially being lost for little economic benefit.
$ARB first and foremost is a governance token, and its main role is protocol governance and ownership.. Let's find a way to direct revenue to the people that create the best value!
agree 100% with the proposal , Holders of $ARB token will get diluted in future if not
The fact that it might be construed as a security is only a concern for American individuals. If you’re an institution you can easily hold these tokens offshore.
We should avoid making decisions with global ramifications just based on American legal frameworks.
I wish this were the case. The reality is that the US has regulatory power over most of the world. It is why a lot of banks abroad are stingy about accepting people with US citizenship as clients, it opens them up to a lot of paperwork and scrutiny that they wouldn't have from other citizenships. The USD being the global reserve currency means that the US can effectively bar anyone from global trade (at least above board) that they don't like. While there are some agreements to "cut out" the USD, they are usually only bilateral and limited in scope (e.g. Russia and China for oil).
I'm not an expert by any means, but a grant being a one-time thing to an entity that the dao would presumably have some amount of information on the team and what they are working on would not be the same thing as openly distributing to thousands of pseudonymous accounts who hold something freely available as a distribution of ongoing profits. It doesn't really matter what the asset is being distributed, eth, arb, stablecoin, whatever. The issue is receiving a share of profits vs. a part of treasury. A lot is at the discretion of the regulators.
I'm not an expert by any means, but a grant being a one-time thing to an entity that the dao would presumably have some amount of information on the team and what they are working on would not be the same thing as openly distributing to thousands of pseudonymous accounts who hold something freely available as a distribution of ongoing profits. It doesn't really matter what the asset is being distributed, eth, arb, stablecoin, whatever. The issue is receiving a share of profits vs. a part of treasury. A lot is at the discretion of the regulators.
as others have noted, this opens up the floodgates to regulatory hell.
the regulators will turn a blind eye to some things, but once there is a monetary incentive, it goes from security regulations issues to things like counterterrorism and taxation, which is why many projects restrict OFAC sanctioned countries. the IRS, FINCEN, HSI, etc. etc. have a lot more power (both political power and, you know, guns) and resources at their disposal than the lowly SEC. Yes, there is a few billion dollars worth of arb that the dao has access to. Suppose for a minute the dao finds itself embroiled in investigations by the alphabet soup bois. Knowing how fickle and fair-weather-minded crypto investors are, who is going to be willing to buy arb that the dao will need to sell to cover legal and compliance expenses? No, they would dump and cut and run and move onto whatever chain wasn't under such scrutiny. Further, there is no reason they wouldn't go after the Foundation as well through RICO or something along those lines given that the Foundation acts based on the direction of the dao. Arb is currently able to avoid this scrutiny because while it has monetary value, it is only a "worthless governance token". Are there other projects and protocols in the space that are worse offenders where this is concerned? Yes, absolutely. I say, let them throw their project funds into the massive money pit that is the legal fight with state-level actors to determine regulatory clarity surrounding crypto. Not us.
as others have noted, this opens up the floodgates to regulatory hell.
the regulators will turn a blind eye to some things, but once there is a monetary incentive, it goes from security regulations issues to things like counterterrorism and taxation, which is why many projects restrict OFAC sanctioned countries. the IRS, FINCEN, HSI, etc. etc. have a lot more power (both political power and, you know, guns) and resources at their disposal than the lowly SEC. Yes, there is a few billion dollars worth of arb that the dao has access to. Suppose for a minute the dao finds itself embroiled in investigations by the alphabet soup bois. Knowing how fickle and fair-weather-minded crypto investors are, who is going to be willing to buy arb that the dao will need to sell to cover legal and compliance expenses? No, they would dump and cut and run and move onto whatever chain wasn't under such scrutiny. Further, there is no reason they wouldn't go after the Foundation as well through RICO or something along those lines given that the Foundation acts based on the direction of the dao. Arb is currently able to avoid this scrutiny because while it has monetary value, it is only a "worthless governance token". Are there other projects and protocols in the space that are worse offenders where this is concerned? Yes, absolutely. I say, let them throw their project funds into the massive money pit that is the legal fight with state-level actors to determine regulatory clarity surrounding crypto. Not us.
Another bleak possibility is a black swan event that affects arbitrum but not ethereum as a whole. In this scenario, arb may have significantly reduced in value, meaning the dao would have to sell more arb into the market simply to keep the lights on, let alone being able to enact countermeasures to the black swan event, whatever it may be. Even if there is no such event, crypto being crypto, a prolonged "crypto winter" is always a possibility. Alts usually do worse in that case, and just like the black swan scenario, the dao would have to sell more arb than is normal into a market that is already weak just to maintain operations. In both scenarios, it would have to, at some point, be put through governance to cease these distributions, which would weaken arb price further, and even at the end of it there would be less eth to access as past revenue will have already been distributed and the eth coming in would be much less substantial due to less transaction volume in either scenario. Better to have an eth war chest socked away, and more consistently coming in, in both scenarios.
By the way this is worded, it sounds like it is suggesting distributing ALL of the revenue out to token delegators. If this is not the case, this paragraph can be disregarded, but I would suggest giving more clarity as to the % you're proposing be paid out if it isn't 100%. While in many ways crypto is different than traditional business, I think it is useful to look to traditional business for guidance in some areas. Businesses that pay out 100% or even close to 100% of revenue are not meant to last, and often only do so because of tax breaks associated with doing so. Major examples are Master-Limited Partnerships (MLPs) and [in the USA] Real Estate Investment Trusts (REITs). MLPs are generally distributed amongst a small number of people and are generally not designed to outlast the lifespans of those people. REITs generally apply to a fixed set of assets and usually only grow through debt issuance and further sales of trust units. Somehow I can't see the prospect of issuing new tokens beyond the max supply or a ticking clock until the dao is basically defunct due to lack of funds going over well in the community. If this does make it through to the AIP stage, I would strongly urge restricting distributions to within 10-20% of revenue given the fast-paced and growth-inclined current nature of crypto.
All in all, as much as getting a nice payday on a token received for free is appealing, I don't think this is the best way forward for the longevity of the dao.
Thank you for getting this conversation started! I agree with the notion that only tokens active in governance should be considered for sequencer revenue distributions if we go down this path. Potentially, these wallets should be required to reach other KPIs as well, such as transacting on chain, bridging in value, and maybe other barometers too.
In my opinion, an in-depth broader conversation is required before something like this goes up for vote. My main question, can sequencer revenue be better utilized reinvested into Arbitrum's future? Given the treasury's substantial value + foundation + grants program (soon), returning some protocol revenue to token holders is likely fine. That being said we should have a conversation and I'm sure many disagree with me on this topic.
Thank you for getting this conversation started! I agree with the notion that only tokens active in governance should be considered for sequencer revenue distributions if we go down this path. Potentially, these wallets should be required to reach other KPIs as well, such as transacting on chain, bridging in value, and maybe other barometers too.
In my opinion, an in-depth broader conversation is required before something like this goes up for vote. My main question, can sequencer revenue be better utilized reinvested into Arbitrum's future? Given the treasury's substantial value + foundation + grants program (soon), returning some protocol revenue to token holders is likely fine. That being said we should have a conversation and I'm sure many disagree with me on this topic.
Additionally, $8M is probably not a substantial enough sum of money to return to token holders. 166.93M ARB is currently delegated. That means less than 5c in ETH per ARB, assuming no more tokens get delegated, which they would if something like this passes given over 1b are in circulation. Assuming the number of ARB delegate reaches half of the circulating supply, this would mean 1.25 cents per arb.
I also think it is important we take into account regulatory scrutiny. There are many novel techniques utilized by other DAOs that attempt to achieve regulatory arbitrage and i think a significant amount of research on this topic is required before we consider implementations. For example buy and burn, gas rebates for ARB token holders, or many other potential mechanisms to give token holders value without bringing as much attention in the US.
as others have noted, this opens up the floodgates to regulatory hell.
the regulators will turn a blind eye to some things, but once there is a monetary incentive, it goes from security regulations issues to things like counterterrorism and taxation, which is why many projects restrict OFAC sanctioned countries. the IRS, FINCEN, HSI, etc. etc. have a lot more power (both political power and, you know, guns) and resources at their disposal than the lowly SEC. Yes, there is a few billion dollars worth of arb that the dao has access to. Suppose for a minute the dao finds itself embroiled in investigations by the alphabet soup bois. Knowing how fickle and fair-weather-minded crypto investors are, who is going to be willing to buy arb that the dao will need to sell to cover legal and compliance expenses? No, they would dump and cut and run and move onto whatever chain wasn't under such scrutiny. Further, there is no reason they wouldn't go after the Foundation as well through RICO or something along those lines given that the Foundation acts based on the direction of the dao. Arb is currently able to avoid this scrutiny because while it has monetary value, it is only a "worthless governance token". Are there other projects and protocols in the space that are worse offenders where this is concerned? Yes, absolutely. I say, let them throw their project funds into the massive money pit that is the legal fight with state-level actors to determine regulatory clarity surrounding crypto. Not us.
as others have noted, this opens up the floodgates to regulatory hell.
the regulators will turn a blind eye to some things, but once there is a monetary incentive, it goes from security regulations issues to things like counterterrorism and taxation, which is why many projects restrict OFAC sanctioned countries. the IRS, FINCEN, HSI, etc. etc. have a lot more power (both political power and, you know, guns) and resources at their disposal than the lowly SEC. Yes, there is a few billion dollars worth of arb that the dao has access to. Suppose for a minute the dao finds itself embroiled in investigations by the alphabet soup bois. Knowing how fickle and fair-weather-minded crypto investors are, who is going to be willing to buy arb that the dao will need to sell to cover legal and compliance expenses? No, they would dump and cut and run and move onto whatever chain wasn't under such scrutiny. Further, there is no reason they wouldn't go after the Foundation as well through RICO or something along those lines given that the Foundation acts based on the direction of the dao. Arb is currently able to avoid this scrutiny because while it has monetary value, it is only a "worthless governance token". Are there other projects and protocols in the space that are worse offenders where this is concerned? Yes, absolutely. I say, let them throw their project funds into the massive money pit that is the legal fight with state-level actors to determine regulatory clarity surrounding crypto. Not us.
Another bleak possibility is a black swan event that affects arbitrum but not ethereum as a whole. In this scenario, arb may have significantly reduced in value, meaning the dao would have to sell more arb into the market simply to keep the lights on, let alone being able to enact countermeasures to the black swan event, whatever it may be. Even if there is no such event, crypto being crypto, a prolonged "crypto winter" is always a possibility. Alts usually do worse in that case, and just like the black swan scenario, the dao would have to sell more arb than is normal into a market that is already weak just to maintain operations. In both scenarios, it would have to, at some point, be put through governance to cease these distributions, which would weaken arb price further, and even at the end of it there would be less eth to access as past revenue will have already been distributed and the eth coming in would be much less substantial due to less transaction volume in either scenario. Better to have an eth war chest socked away, and more consistently coming in, in both scenarios.
By the way this is worded, it sounds like it is suggesting distributing ALL of the revenue out to token delegators. If this is not the case, this paragraph can be disregarded, but I would suggest giving more clarity as to the % you're proposing be paid out if it isn't 100%. While in many ways crypto is different than traditional business, I think it is useful to look to traditional business for guidance in some areas. Businesses that pay out 100% or even close to 100% of revenue are not meant to last, and often only do so because of tax breaks associated with doing so. Major examples are Master-Limited Partnerships (MLPs) and [in the USA] Real Estate Investment Trusts (REITs). MLPs are generally distributed amongst a small number of people and are generally not designed to outlast the lifespans of those people. REITs generally apply to a fixed set of assets and usually only grow through debt issuance and further sales of trust units. Somehow I can't see the prospect of issuing new tokens beyond the max supply or a ticking clock until the dao is basically defunct due to lack of funds going over well in the community. If this does make it through to the AIP stage, I would strongly urge restricting distributions to within 10-20% of revenue given the fast-paced and growth-inclined current nature of crypto.
All in all, as much as getting a nice payday on a token received for free is appealing, I don't think this is the best way forward for the longevity of the dao.
Thank you for getting this conversation started! I agree with the notion that only tokens active in governance should be considered for sequencer revenue distributions if we go down this path. Potentially, these wallets should be required to reach other KPIs as well, such as transacting on chain, bridging in value, and maybe other barometers too.
In my opinion, an in-depth broader conversation is required before something like this goes up for vote. My main question, can sequencer revenue be better utilized reinvested into Arbitrum's future? Given the treasury's substantial value + foundation + grants program (soon), returning some protocol revenue to token holders is likely fine. That being said we should have a conversation and I'm sure many disagree with me on this topic.
Thank you for getting this conversation started! I agree with the notion that only tokens active in governance should be considered for sequencer revenue distributions if we go down this path. Potentially, these wallets should be required to reach other KPIs as well, such as transacting on chain, bridging in value, and maybe other barometers too.
In my opinion, an in-depth broader conversation is required before something like this goes up for vote. My main question, can sequencer revenue be better utilized reinvested into Arbitrum's future? Given the treasury's substantial value + foundation + grants program (soon), returning some protocol revenue to token holders is likely fine. That being said we should have a conversation and I'm sure many disagree with me on this topic.
Additionally, $8M is probably not a substantial enough sum of money to return to token holders. 166.93M ARB is currently delegated. That means less than 5c in ETH per ARB, assuming no more tokens get delegated, which they would if something like this passes given over 1b are in circulation. Assuming the number of ARB delegate reaches half of the circulating supply, this would mean 1.25 cents per arb.
I also think it is important we take into account regulatory scrutiny. There are many novel techniques utilized by other DAOs that attempt to achieve regulatory arbitrage and i think a significant amount of research on this topic is required before we consider implementations. For example buy and burn, gas rebates for ARB token holders, or many other potential mechanisms to give token holders value without bringing as much attention in the US.
Sometimes the potential of something is better for price than its actualisation
Like the NFT project that tanks once they actually complete a deliverable & now there's no anticipation left
Our sequencer currently has 12k eth in it and we're printing 1k eth per month. We should 1st categorise all the options for it's utilization & then have an informal vote on this thread
Imagine grants getting the needed funding in ETH that they can sell right away, then also getting ARB which is unlocked over 10 years, but used for voting from the day they receive it.
Plurality Labs will be deploying or receiving 3.36 million ARB in the next 6 months. Just yesterday, we received our first payment from the PL-ARB Grants Safety Multisig!
What if we could exchange part of this for ETH from the sequencer fees?
Perhaps the conversation here led people to believe that there isn't an appetite for this. I am strongly against it myself, but if there was desire I would assume someone would see the potential to drive this home. It's also possible that everyone is distracted with STIP now.
This is a great article indeed, thanks for sharing! It has actually changed my mind on this proposal, I no longer think it makes sense to give dividends to token holders from sequencer revenue.
Far better is diversifying the treasury with stables & bluechips & then voting each year on what % of these reserves should be distributed to token holders.
Sometimes the potential of something is better for price than its actualisation
Like the NFT project that tanks once they actually complete a deliverable & now there's no anticipation left
Our sequencer currently has 12k eth in it and we're printing 1k eth per month. We should 1st categorise all the options for it's utilization & then have an informal vote on this thread
Imagine grants getting the needed funding in ETH that they can sell right away, then also getting ARB which is unlocked over 10 years, but used for voting from the day they receive it.
Plurality Labs will be deploying or receiving 3.36 million ARB in the next 6 months. Just yesterday, we received our first payment from the PL-ARB Grants Safety Multisig!
What if we could exchange part of this for ETH from the sequencer fees?
Perhaps the conversation here led people to believe that there isn't an appetite for this. I am strongly against it myself, but if there was desire I would assume someone would see the potential to drive this home. It's also possible that everyone is distracted with STIP now.
This is a great article indeed, thanks for sharing! It has actually changed my mind on this proposal, I no longer think it makes sense to give dividends to token holders from sequencer revenue.
Far better is diversifying the treasury with stables & bluechips & then voting each year on what % of these reserves should be distributed to token holders.
This is a great article indeed, thanks for sharing! It has actually changed my mind on this proposal, I no longer think it makes sense to give dividends to token holders from sequencer revenue.
Far better is diversifying the treasury with stables & bluechips & then voting each year on what % of these reserves should be distributed to token holders.
The immediate focus should be on reducing the DAO's existential risk from ARB price dropping. The case of MakerDAO was particularly instructive in that regard. They distributed revenue to token holders but during the bear market in 2020, they didn't have enough reserves to protect their token value which cost them $10 million for a $6 million credit problem. We need to be counter-cyclical in our treasury management, when ARB price falls we use reserves to protect the price, when it goes up we sell to create more reserves
This seems quite sensitive i gotta say
This is a great article indeed, thanks for sharing! It has actually changed my mind on this proposal, I no longer think it makes sense to give dividends to token holders from sequencer revenue.
Far better is diversifying the treasury with stables & bluechips & then voting each year on what % of these reserves should be distributed to token holders.
The immediate focus should be on reducing the DAO's existential risk from ARB price dropping. The case of MakerDAO was particularly instructive in that regard. They distributed revenue to token holders but during the bear market in 2020, they didn't have enough reserves to protect their token value which cost them $10 million for a $6 million credit problem. We need to be counter-cyclical in our treasury management, when ARB price falls we use reserves to protect the price, when it goes up we sell to create more reserves
This seems quite sensitive i gotta say
(note: opinions are my own I don't represent anyone in this discussion other than myself)
Reframing Token Holders: It's essential to note that ARB token holders should not be viewed as 'investors' but rather as 'governance participants'. The airdrop was not a sale, the tokens were given to folks the Arbitrum team hoped would participate in governing. The primary role of these token holders is to participate in the decision-making processes that guide the development and direction of the Arbitrum project. By participating in governance, they contribute to the network's growth and resilience, rather than expecting a traditional financial return.
Long-term Value and Credibly Neutral Infrastructure: The intrinsic value of the ARB token isn't derived from monetary returns. Rather, its long-term value is tied to the success of the Arbitrum ecosystem as a whole. This includes ensuring that hyperscale projects which build on Arbitrum have a credibly neutral layer to solve their infrastructure challenges in the future. This neutrality and robustness of infrastructure will attract a diverse range of projects, thereby increasing the utility and, consequently, the non-monetary value of the ARB token. Long term the folks who seek to purchase ARB are more aligned if they are purchasing ARB to increase their voice in the Governance. This governance will be critically important to institutions building on Arbitrum who want to be sure they have a say in the operation of their infrastructure level. If someone builds a multi-billion dollar ecosystem on Arbitrum, it will be a necessity for them to hold a large amount of ARB to ensure that they can trust the neutrality of the infrastructure.
Sustainable Treasury Management: While it's true that the ARB treasury is a significant source of funding for projects in the ecosystem, the notion that its value would drop to zero if buyers stop purchasing ARB might be an overstatement. The treasury's value is not solely dependent on the token's market price, but also on the overall health and success of the ecosystem, which would continue to attract new participants and sustain demand for the token.
(note: opinions are my own I don't represent anyone in this discussion other than myself)
Reframing Token Holders: It's essential to note that ARB token holders should not be viewed as 'investors' but rather as 'governance participants'. The airdrop was not a sale, the tokens were given to folks the Arbitrum team hoped would participate in governing. The primary role of these token holders is to participate in the decision-making processes that guide the development and direction of the Arbitrum project. By participating in governance, they contribute to the network's growth and resilience, rather than expecting a traditional financial return.
Long-term Value and Credibly Neutral Infrastructure: The intrinsic value of the ARB token isn't derived from monetary returns. Rather, its long-term value is tied to the success of the Arbitrum ecosystem as a whole. This includes ensuring that hyperscale projects which build on Arbitrum have a credibly neutral layer to solve their infrastructure challenges in the future. This neutrality and robustness of infrastructure will attract a diverse range of projects, thereby increasing the utility and, consequently, the non-monetary value of the ARB token. Long term the folks who seek to purchase ARB are more aligned if they are purchasing ARB to increase their voice in the Governance. This governance will be critically important to institutions building on Arbitrum who want to be sure they have a say in the operation of their infrastructure level. If someone builds a multi-billion dollar ecosystem on Arbitrum, it will be a necessity for them to hold a large amount of ARB to ensure that they can trust the neutrality of the infrastructure.
Sustainable Treasury Management: While it's true that the ARB treasury is a significant source of funding for projects in the ecosystem, the notion that its value would drop to zero if buyers stop purchasing ARB might be an overstatement. The treasury's value is not solely dependent on the token's market price, but also on the overall health and success of the ecosystem, which would continue to attract new participants and sustain demand for the token.
Additionally, while the DAO owns several billion in ARB token, the sequencer revenue, ETH, is still far more liquid. In many ways it probably makes more sense for the DAO to spend the ETH rather than the ARB. Sales in ETH wont' affect the ARB price, while large sales of ARB would.
Even though this sounds tempting, I don't think it would be a good idea considering the current regulatory landscape. As mentioned previously this could easily turn ARB into a security and bar American citizens from participating in Arbitrum's governance, which could have more downside than whatever value we could get from this revenue-sharing incentive.
Arbitrum team already runs a centralised sequencer and doesn’t comply with AML or any other law that most probably applies.
I think the answer here is simple:
It's illegal.
In many places too, not just the USA. It turns the token into security.
I think the answer here is simple:
It's illegal.
In many places too, not just the USA. It turns the token into security.
From a practical point of view, I think the monetization of the token would lead to unexpected and undesirable secondary effects. Organizations would accumulate tokens with the desire to maximize their extraction from the system. Short term thinking would minimize investment to R&D, expansion, building more stuff, and instead maximize extraction. The organization would fall prey to nefarious actors which would scare aware large scale infrastructure projects that would seek to build on Arbitrum, thus reducing the long term value proposition of Arbitrum for teams, and accelerate short term extraction.
I would suggest the revenue be directed to multiple grants programs and multiple Arb aligned organizations that drive value to the ecosystem.
Might be interesting to stake the eth as well!
(note: opinions are my own I don't represent anyone in this discussion other than myself)
Reframing Token Holders: It's essential to note that ARB token holders should not be viewed as 'investors' but rather as 'governance participants'. The airdrop was not a sale, the tokens were given to folks the Arbitrum team hoped would participate in governing. The primary role of these token holders is to participate in the decision-making processes that guide the development and direction of the Arbitrum project. By participating in governance, they contribute to the network's growth and resilience, rather than expecting a traditional financial return.
Long-term Value and Credibly Neutral Infrastructure: The intrinsic value of the ARB token isn't derived from monetary returns. Rather, its long-term value is tied to the success of the Arbitrum ecosystem as a whole. This includes ensuring that hyperscale projects which build on Arbitrum have a credibly neutral layer to solve their infrastructure challenges in the future. This neutrality and robustness of infrastructure will attract a diverse range of projects, thereby increasing the utility and, consequently, the non-monetary value of the ARB token. Long term the folks who seek to purchase ARB are more aligned if they are purchasing ARB to increase their voice in the Governance. This governance will be critically important to institutions building on Arbitrum who want to be sure they have a say in the operation of their infrastructure level. If someone builds a multi-billion dollar ecosystem on Arbitrum, it will be a necessity for them to hold a large amount of ARB to ensure that they can trust the neutrality of the infrastructure.
Sustainable Treasury Management: While it's true that the ARB treasury is a significant source of funding for projects in the ecosystem, the notion that its value would drop to zero if buyers stop purchasing ARB might be an overstatement. The treasury's value is not solely dependent on the token's market price, but also on the overall health and success of the ecosystem, which would continue to attract new participants and sustain demand for the token.
(note: opinions are my own I don't represent anyone in this discussion other than myself)
Reframing Token Holders: It's essential to note that ARB token holders should not be viewed as 'investors' but rather as 'governance participants'. The airdrop was not a sale, the tokens were given to folks the Arbitrum team hoped would participate in governing. The primary role of these token holders is to participate in the decision-making processes that guide the development and direction of the Arbitrum project. By participating in governance, they contribute to the network's growth and resilience, rather than expecting a traditional financial return.
Long-term Value and Credibly Neutral Infrastructure: The intrinsic value of the ARB token isn't derived from monetary returns. Rather, its long-term value is tied to the success of the Arbitrum ecosystem as a whole. This includes ensuring that hyperscale projects which build on Arbitrum have a credibly neutral layer to solve their infrastructure challenges in the future. This neutrality and robustness of infrastructure will attract a diverse range of projects, thereby increasing the utility and, consequently, the non-monetary value of the ARB token. Long term the folks who seek to purchase ARB are more aligned if they are purchasing ARB to increase their voice in the Governance. This governance will be critically important to institutions building on Arbitrum who want to be sure they have a say in the operation of their infrastructure level. If someone builds a multi-billion dollar ecosystem on Arbitrum, it will be a necessity for them to hold a large amount of ARB to ensure that they can trust the neutrality of the infrastructure.
Sustainable Treasury Management: While it's true that the ARB treasury is a significant source of funding for projects in the ecosystem, the notion that its value would drop to zero if buyers stop purchasing ARB might be an overstatement. The treasury's value is not solely dependent on the token's market price, but also on the overall health and success of the ecosystem, which would continue to attract new participants and sustain demand for the token.
Additionally, while the DAO owns several billion in ARB token, the sequencer revenue, ETH, is still far more liquid. In many ways it probably makes more sense for the DAO to spend the ETH rather than the ARB. Sales in ETH wont' affect the ARB price, while large sales of ARB would.
Even though this sounds tempting, I don't think it would be a good idea considering the current regulatory landscape. As mentioned previously this could easily turn ARB into a security and bar American citizens from participating in Arbitrum's governance, which could have more downside than whatever value we could get from this revenue-sharing incentive.
Arbitrum team already runs a centralised sequencer and doesn’t comply with AML or any other law that most probably applies.
I think the answer here is simple:
It's illegal.
In many places too, not just the USA. It turns the token into security.
I think the answer here is simple:
It's illegal.
In many places too, not just the USA. It turns the token into security.
From a practical point of view, I think the monetization of the token would lead to unexpected and undesirable secondary effects. Organizations would accumulate tokens with the desire to maximize their extraction from the system. Short term thinking would minimize investment to R&D, expansion, building more stuff, and instead maximize extraction. The organization would fall prey to nefarious actors which would scare aware large scale infrastructure projects that would seek to build on Arbitrum, thus reducing the long term value proposition of Arbitrum for teams, and accelerate short term extraction.
I would suggest the revenue be directed to multiple grants programs and multiple Arb aligned organizations that drive value to the ecosystem.
Might be interesting to stake the eth as well!
Even though this sounds tempting, I don't think it would be a good idea considering the current regulatory landscape. As mentioned previously this could easily turn ARB into a security and bar American citizens from participating in Arbitrum's governance, which could have more downside than whatever value we could get from this revenue-sharing incentive.
Arbitrum team already runs a centralised sequencer and doesn’t comply with AML or any other law that most probably applies.
Even if this was real, that doesn't mean that the DAO shouldn't be compliant.
Why should a DAO/chain act in the interest of 1 countries regulation anyway?
It's not just the US, they are simply the ones that are more aggressive about it, but multiple countries have similar securities laws based on similar precedents to Howey, so we have to think in the long term. Anyways, it wouldn't be fair to bar US citizens from governance either.
yeah lets reward people that create the best value!.. with the massive ARB treasury balance we have.
There are other ways to reward people that create the best value, which is why we have a grants program.
I would really support doing something like this, but it just doesn't seem feasible considering the legal risk involved. We have to acknowledge that we don't exist in a legal vacuum. Hopefully regulations might be more relaxed in the future and then we could do something like this, but for now, I would reconsider it.
This is my personal opinion and not that of Seed Latam
While distributing to ARB holders could be a positive short term return for HODLers, over the long term this does not help the ecosystem grow! If we as a DAO want to remain competitive with a dozen or so L2s and possibly many more in the future, we must focus on ecosystem growth in these initial stages.
I suggest that this revenue goes to the DAO treasury which can be spent on growth experiments, positive governance contribution, researching and testing tokenomics and funding public goods.
I don't know the details of the legal issues that come from setting up $ARB to give dividends to holders... from what little I do know tho it sounds like a bad idea.
A better mechanism might be to use the ETH to buy ARB (via auction or via a dex) and either burn it or give the ARB to the DAO, it would probably bring more profit to the token holders and maybe would be easier for the lawyer types to agree to.
Even though this sounds tempting, I don't think it would be a good idea considering the current regulatory landscape. As mentioned previously this could easily turn ARB into a security and bar American citizens from participating in Arbitrum's governance, which could have more downside than whatever value we could get from this revenue-sharing incentive.
Arbitrum team already runs a centralised sequencer and doesn’t comply with AML or any other law that most probably applies.
Even if this was real, that doesn't mean that the DAO shouldn't be compliant.
Why should a DAO/chain act in the interest of 1 countries regulation anyway?
It's not just the US, they are simply the ones that are more aggressive about it, but multiple countries have similar securities laws based on similar precedents to Howey, so we have to think in the long term. Anyways, it wouldn't be fair to bar US citizens from governance either.
yeah lets reward people that create the best value!.. with the massive ARB treasury balance we have.
There are other ways to reward people that create the best value, which is why we have a grants program.
I would really support doing something like this, but it just doesn't seem feasible considering the legal risk involved. We have to acknowledge that we don't exist in a legal vacuum. Hopefully regulations might be more relaxed in the future and then we could do something like this, but for now, I would reconsider it.
This is my personal opinion and not that of Seed Latam
While distributing to ARB holders could be a positive short term return for HODLers, over the long term this does not help the ecosystem grow! If we as a DAO want to remain competitive with a dozen or so L2s and possibly many more in the future, we must focus on ecosystem growth in these initial stages.
I suggest that this revenue goes to the DAO treasury which can be spent on growth experiments, positive governance contribution, researching and testing tokenomics and funding public goods.
I don't know the details of the legal issues that come from setting up $ARB to give dividends to holders... from what little I do know tho it sounds like a bad idea.
A better mechanism might be to use the ETH to buy ARB (via auction or via a dex) and either burn it or give the ARB to the DAO, it would probably bring more profit to the token holders and maybe would be easier for the lawyer types to agree to.
