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- 1 Ether worth nearly $6.2 million will be distributed by Ethereum layer-2 blockchain Arbitrum to its Decentralized Autonomous Organization.
- 2 The current cost of sending ETH on Arbitrum is $0.25 and that of swapping tokens is $0.68 at the time of writing.
- 3 Arbitrum launched an incentive program after the protocol team clashed with the community and a nearly $1 billion fund transfer wasn’t approved by ARB holders.
Excellent and big news for the ARB holders, as Ether worth nearly $6.2 million will be distributed by Ethereum layer-2 blockchain Arbitrum to its Decentralized Autonomous Organization (DAO). The project was announced on May 9 via Twitter. ARB holders can claim the rewards.
The funds collected are generally the base fees and excess Revenue generated is from network transactions. According to the latest news by Arbitrum’s tweet, a total of 3352 Eth will be collected by its DAO. DAOs are collectively owned and managed by their members. They make decisions through proposals voted on by the group and also have treasuries, according to internet-native organizations.
As everybody knows, Arbitrum is a viral scaling network used by many decentralized applications and blockchain developers. All the users pay fees on Arbitrum during transactions.
Data from Crypto fees clearly shows that Arbitrum users have paid $387,423 in the last seven days where the current cost of sending ETH on Arbitrum is $0.25 and that of swapping tokens is $0.68 at the time of writing.
The fees paid on Arbitrum One are categorized into two sections, L1 and L2. According to the protocol, the L1 fee covers the cost of posting a transaction on the Ethereum network and the L2 fee covers the cost of running the network.
When the revenue of 3352 ETH was broken down it was found that this revenue came from three sections. 582 ETH surplus funds were generated from the L1 fee, 1308 ETH from the base fees and 1462 ETH surplus from the L2 fee.
The smart contract will periodically trigger the revenue distribution by a mechanism created by protocol, according to the proposal discussion on Arbitrum’s governance forum. ARB holders can claim their rewards but only delegated ARB tokens will be eligible for the same.
According to Arbitrum, this move will align community incentives and will give ARB a purpose beyond the worthless governance token. Many people in the community support this proposal while many were seen to oppose it by highlighting that the revenue distribution might further serve to classify the ARB token as a security.
Oxytocin tweeted regarding the same, that simply holding $ARB will be extremely inefficient and a nightmare.
Saying on behalf of all the DAO who own the revenue they generate, that turning $ARB into security is not beneficial. Instead, this revenue could be distributed to people providing important services or stakes to the wider ecosystem and allow sustainable growth. This will be the case especially when the OP seems to be suggesting to distribute the tokens using disperse, leading to a lot of important revenue potentially being lost for little economic benefit.
Arbitrum launched an incentive program after the protocol team clashed with the community and a nearly $1 billion fund transfer wasn’t approved by ARB holders.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
