The Ethereum layer-2 blockchain, Arbitrum has announced that it will distribute Ether (ETH) worth nearly $6.2 million to its decentralized autonomous organization (DAO). This news was announced on Twitter on May 9. To claim the rewards, ARB holders need to act fast.
The funds to be collected are base fees and surplus revenue generated from network transactions. Arbitrum’s tweet stated that its DAO will collect a total of 3,352 ETH. DAOs are internet-native organizations that are collectively owned and managed by their members. These organizations have treasuries and make decisions through proposals voted on by the group.
This announcement is expected to have an impact on ETH’s market value, as the ticker price has already taken a dip down to $1,823. Arbitrum’s move to reward its DAO members is significant and shows the platform’s commitment to decentralization and community-driven decision making. The distribution of these funds will likely drive further growth and engagement among ARB holders.
Arbitrum, a leading scaling network for Ethereum, has implemented a fee system that has generated significant revenue for the platform’s DAO. According to Crypto Fees, users of Arbitrum One paid $387,423 in fees over the past seven days. At the time of writing, the cost of sending ETH on the platform is $0.25, while swapping tokens costs $0.68.
Each fee paid on Arbitrum One is divided into two parts, the L1 fee and L2 fee. The L1 fee covers the cost of posting a transaction on the Ethereum network, while the L2 fee covers the cost of running the network.
A breakdown of revenue generated from the fees reveals a surplus of around 582 ETH from the L1 fee, nearly 1,308 ETH from base fees, and a surplus of 1,462 ETH from the L2 fee. Combined, this represents revenue of 3,352 ETH for Arbitrum’s DAO.
Arbitrum’s governance forum is currently discussing a proposal to distribute this revenue periodically via a smart contract. Only delegated ARB tokens will be eligible for revenue distribution, and holders must claim their rewards. This move is aimed at aligning community incentives and giving the ARB token a clear purpose beyond being a governance token. Previously, Arbitrum Airdropped about $120M to projects that have been built on the Arbitrum network.
While most community members support the proposal, some have expressed concerns about the possibility of the ARB token being classified as a security due to the revenue distribution mechanism. Despite these concerns, Arbitrum’s commitment to creating a thriving ecosystem with aligned incentives and a clear purpose for its tokens is a significant step forward for the platform and its users.
