Arbitrum has initiated token distribution to eligible DAOs within its ecosystem.
Arbitrum, the foremost Layer 2 network on Ethereum, has begun allocating its governance tokens to eligible decentralized autonomous organizations within its ecosystem.
The core Arbitrum team previously designated 1.13 percent of the total 10 billion token supply, or 113 million ARB tokens with a current market value of more than $145 million, for distribution to qualified initiatives.
On Twitter, Arbitrum announced the distribution of the first shipment of tokens to DAOs that confirmed receiving test transactions. In the meantime, on-chain data from Arbitrum revealed that the foundation transferred a sizeable quantity of ARB tokens to 125 DAO addresses today, with additional distributions expected in the future.
Arbitrum’s rival in the Layer 2 niche, Optimism, employed a similar strategy, distributing governance tokens to initiatives within its ecosystem shortly after its 2022 debut.
The governance tokens granted to DAOs may stimulate network activity on the Arbitrum blockchain. These allocations may be used as parts of their treasuries or for other purposes as determined by their communities through governance votes.
GMX, TreasureDAO, SushiSwap, Uniswap, Aave, Hop Protocol, Radiant Capital, Balancer, Gains Network, Synapse, MakerDAO, Vesta, Curve, Layer Zero, 1inch, and Swapr are among the projects receiving tokens.
There was a short debate about the Arbitrum Foundation’s DAO, but this has subsided as the foundation has continued to provide support for other DAOs inside its ecosystem. The proposal AIP-1 intended to transfer 750 million tokens to the foundation for capitalization, but it was denied after it was discovered that the foundation had already spent 50 million tokens without obtaining appropriate governance authorization.
Nonetheless, in the follow-up proposal AIP 1.1, the community agreed to transfer all 750,000,000 ARB tokens to the Foundation, which will use them to fund special grants from its administrative budget.
The allocation made to DAOs today was not a grant, but rather a free bonus given to projects that function as DAOs and contribute to the value of the Arbitrum network, much like an airdrop given to users.