Original editor: Biteye core contributor Crush
Original editor: Biteye core contributor Crush
The Arbitrum Foundation announced that it will airdrop $ARB governance tokens to its community users on March 23, and launch its layer 3 development tool, Arbitrum Orbit, which brings Arbitrum one step closer to complete decentralization.
At present, there have been many reports that have carried out detailed analysis on the valuation of $ARB. If you have any needs, you can refer to the push on the Biteye official account on March 17: "An Interpretation of the Airdrop Value of Arbitrum in One Article"
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01 Arbitrum Development Review
Arbitrum is a Layer 2 protocol that makes Ethereum transactions faster and cheaper. Developers use Arbitrum to build user-friendly decentralized applications (dApps) that can take advantage of the scalability benefits of the Arbitrum Rollup and AnyTrust protocols.
In 2021, Arbitrum introduces Arbitrum One. This was quickly followed by the launch of Arbitrum Nova, a standalone AnyTrust chain purpose-built for ultra-low-cost transactions.
In August 2022, after performance issues were exposed in Odyssey, Arbitrum One upgraded to the Arbitrum Nitro stack, increasing its scaling capabilities by 7-10x.
Note: The three versions of Arbitrum are One, Nitro and Nova. Among them, Nitro is an upgrade of One's technology stack, not a network independent of One. The full name of Nitro after the upgrade is Arbitrum One, while Nova, which was launched in early August, is a network independent of One;
The core difference between One/Nitro and Nova is data availability. One’s data availability is on-chain (Ethereum mainnet), while Nova’s data availability is off-chain (Data Availability Committee DAC).
The distribution of $ARB governance tokens enables decentralized governance of Arbitrum One and Arbitrum Nova and their underlying protocols.
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02 Advantages of Web3 Governance
$ARB, like most tokens, is called a governance token, and its main function is limited to governance. Let's first review the process of traditional Web2 governance and Web3 governance for comparison.
Traditionally, Web2 technologies have been built by board-managed companies. This board is usually a small group of people elected by shareholders. When company decisions need to be made, board members meet and vote.
The decision-making agreement of the board of directors is not always visible to the shareholders. Although the board of directors has an obligation to bear the responsibility to the shareholders, the shareholders must trust the board of directors. This trust relationship sounds counter-intuitive, but it is statutory and enforced by law.
Whereas Web3 technologies such as Arbitrum are typically initially built by a company that manages a board. Once these technologies have achieved product-market fit and a community of users and stakeholders has formed, decision-making power in the company can be gradually decentralized.
This is called progressive decentralization, and it's what Arbitrum is doing. Progressive decentralization is typically facilitated by three key elements:
1) DAO organization
The Arbitrum DAO (Decentralized Autonomous Organization) is a new entity with decision-making power over the Arbitrum One and Arbitrum Nova chains and their underlying protocols.
The DAO adheres to the Arbitrum DAO Charter, which defines how the DAO operates and is established in several social contracts.
2) Governance Token Issuance
After the issuance of governance tokens, members holding governance tokens will be able to become members of DAO, and can vote for or against DAO proposals.
Arbitrum's governance token is $ARB, and the initial token offering will be distributed to eligible wallet addresses (users) via an airdrop on March 23.
3) Code
DAO governance usually relies on a series of open source smart contracts to implement specific decisions to maintain the development of the protocol. These trustless smart contracts will be used to gradually replace the trust relationship between traditional uncertain shareholders and directors.
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03 Proxy voting
When participating in the Arbitrum DAO, token holders can choose to vote on proposals directly or delegate their voting rights to a proxy.
Proxies are members of the Arbitrum DAO who are elected to exercise voting rights on behalf of other token holders.
This is easy to understand. Analog holders are shareholders of listed companies. They don’t have the time and energy to understand the content of each proposal in detail. Then they can assign their voting rights to designated directors to exercise their voting rights.
Token holders can find a user who has similar beliefs and values as an agent. In the face of most unimportant proposals, the agent can make the same choice as the token holder with a high probability, which can save a lot of time .
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aboutspecific operation process, Arbitrum DAO uses Tally to facilitate the delegation process, both delegation and voting can be done through Tally.
Users can change or revoke any authorization made at any time, and can distribute voting rights to multiple candidates in proportion.
Arbitrum is a public chain (L2 & L3) that has just issued tokens. It is not surprising that there will be a large number of airdrop opportunities in the future, and participation in governance activity will definitely be one of the main qualification screening indicators.
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04 Admin on Arbitrum
In Arbitrum's governance system, there is also a concept of "chain owner", which can be understood as an administrator with super authority, that is, an entity with the ability to upgrade Arbitrum core protocol contracts and set various system parameters.
Let's be clear first that the chain owner is not strictly part of the Arbitrum protocol, but is actually the administrator of the chain, responsible for managing how changes are made to the system.
More specifically, the owner of the chain can modify core system parameters, suspend incoming transactions, and most importantly update any contracts that define and enforce the core protocol.
Some users think that leaving administrator authority for the blockchain is like setting aside a back door for a bank vault, which is not in line with the spirit of the blockchain.But for Arbitrum the admin is necessary:
First, the system requires constant upgrades, Arbitrum has undergone several such upgrades (most notably evolving from the "Arbitrum Classic" technology stack to Arbitrum Nitro), and as technological advancements continue to evolve, unforeseen circumstances may arise.
Additionally, if a critical bug is found in the Arbitrum codebase, it can be escalated with administrator privileges to fix it.
Finally, it is an unavoidable situation. The Ethereum main network is still under continuous development. If the main network undergoes a hard fork (upgrade), administrators are required to maintain compatibility with Layer 2.
The introduction of the $ARB governance token provides decentralized capabilities for using owner privilege escalation protocols.
This round of token airdrops is transparent and has a single address online to distribute ownership as fairly as possible. The goal is to spread ownership among parties with diverse geographical distribution and backgrounds that are beneficial to the Arbitrum ecosystem. On-chain owner transfer to "Arbitrum DAO", the collective of $ARB token holders.
Therefore, after the establishment of Arbitrum DAO, the current protocol upgrade can be carried out in two ways.
The first is the decentralized upgrade path,Only DAO executes each step in the whole process. Suggest an upgrade → open discussion → vote and finally activate it. This is where the innovation of Arbitrum governance lies. Many important attributes in the decentralized upgrade process are enforced at the smart contract level. Any of these steps do not require an authorizing party, and the DAO itself can complete the entire process.
The second upgrade path is the responsibility of the Security Council,This route is similar to the first one, but the difference is that it allows the Security Council (an authorized set of publicly named entities) to skip certain steps in certain circumstances.
Especially in emergency situations, the security committee has the ability to directly upgrade the protocol without delay.
This is a critical role necessary to protect against emergencies, such as the discovery of exploitable vulnerabilities, where the often slow governance path is at odds with maintaining protocol security:
1) If there is an important vulnerability that can be exploited, it will cause more serious consequences to publish it publicly on the public governance forum before the danger is eliminated, so such security vulnerability repair should be done in a low-key manner.
2) Fixes for security-threatening bugs should take effect immediately, without delays like typical DAO governance discussion votes of several weeks.
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05 Arbitrum Governance Outlook
In the future, Arbitrum governance will further explore towards the decentralization of the governance process, and strive to find ways to reduce or even eliminate the security committee.
According to the document, it is not easy to find solutions to these problems in a short time, and as Arbitrum technology continues to mature and the risk situation of various decentralized states changes, the issue of decentralized governance will continue to be an active topic of discussion in the community topic.
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