Arbitrum One and Arbitrum Nova are two of the most widely used Layer 2 scaling solutions for Ethereum. Today, the Arbitrum Foundation announced that it is launching DAO governance for both networks, marking a significant milestone in their decentralization efforts. Along with this, the Foundation will be airdropping $ARB tokens to Arbitrum users on March 23, which will be used to facilitate community governance.
Vitalik Buterin proposed a 3-stage schema for decentralizing rollups, and with the announcement today, Arbitrum has become the first EVM rollup ever to achieve Stage 1. This is an important achievement for both the Arbitrum networks and Ethereum scaling more broadly.
The $ARB token is expected to facilitate the decentralization of the Arbitrum network, and the airdrop will place the governance token in the hands of users who are actively participating in the ecosystem.
The majority of the $ARB supply will be under the control of the Arbitrum community via The Arbitrum Foundation, which is expected to accelerate organic growth of the ecosystem.
$ARB token holders will govern The Arbitrum Foundation through the Arbitrum DAO.
To facilitate effective community governance, users will be able to delegate voting power to individuals they view as effective stewards of their values. Delegates will be expected to vote on proposals that pass through the Arbitrum DAO in a way that represents the token-holders who have assigned their voting power to them.
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The Arbitrum DAO will have the power to control key decisions at the core protocol level, from how the chain's technology is upgraded to how the revenue from the chain can be used to support the ecosystem.
Steven Goldfeder, CEO and Co-Founder of Offchain Labs commented:
"We are extraordinarily excited for the official launch of The Arbitrum Foundation and DAO governance and to see Arbitrum One become the first EVM rollup to advance to Stage 1 decentralization, a tremendous milestone for both Arbitrum and Ethereum."
"Through the community airdrop, the delegation process, and the introduction of the Security Council, community participation and control is at the forefront of today's announcement, and the requirements for receiving a share of Arbitrum governance have been crafted meticulously, optimizing for the longevity of the ecosystem and community."
"Looking ahead, we're moving closer and closer toward a decentralized financial system, with the Arbitrum technology at the very forefront of that..."
Steven Goldfeder, CEO & Co-Founder of Offchain Labs
Arbitrum's governance will be self-executing, meaning that the DAO's votes will directly have the power to effect and execute its on-chain decisions, and not rely on an intermediary to carry out those decisions.
This is a critical milestone for decentralization and gives the community the power to govern the chain. Arbitrum is leading the way as the first L2 to launch self-executing governance.
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The Arbitrum Foundation has also announced the creation of the Arbitrum Security Council, a 12-member multisig of highly regarded community members designed to ensure the security of the chains and be able to act quickly in the event of a security vulnerability.
The decision-making powers of the Security Council are determined by a smart contract that will require multiple secure signatures by its members in order to implement any changes to the protocol. In case of emergency, the Arbitrum Security Council will be able to act quickly but this will require participation from 9 of the 12 members.
The Arbitrum DAO will be the ultimate governing body over the Arbitrum Security Council, with elections for the Council being held twice annually.
The introduction of the Arbitrum Security Council reinforces Arbitrum's focus on decentralization by giving the community the ability to play a more active role in Arbitrum governance and have a say over what occurs within the ecosystem.
Arbitrum is the leading Layer 2 scaling solution for Ethereum, boasting the highest Total Value Locked (TVL) across all L2 networks with approximately $3.61B, 55% market share across all rollups, and the Arbitrum One network recently surpassed Ethereum daily transactions on two occasions.
Closing Thoughts
The launch of DAO governance for the Arbitrum One and Nova networks and the upcoming airdrop of $ARB tokens to users of the Arbitrum ecosystem are important steps in the journey towards a more decentralized financial system.
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By placing governance in the hands of its users, Arbitrum is ensuring that the community has a say in how the network develops and evolves. The Arbitrum Foundation is continuing to lead the way in developing cutting-edge blockchain technology and promoting blockchain adoption.
