The $ARB token: A conceptual overview
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The $ARB token is an ERC-20 governance token that allows its holders to participate in the Arbitrum DAO's on-chain governance protocol. The $ARB token is minted by a smart contract that lives on Arbitrum One, a Layer 2 Arbitrum rollup chain.
The Arbitrum DAO is responsible for managing both the governance protocol as defined within the Constitution, and the technologies that the DAO governs. This includes the Arbitrum One and Arbitrum Nova chains, along with their underlying protocols.
If you own $ARB tokens, you can vote on governance proposals that affect the operation and evolution of the Arbitrum One and Arbitrum Nova chains. This includes proposals for upgrades to the chain, as well as proposals for how to use the funds within the DAO Treasury.
When you vote on an on-chain proposal, you're using your $ARB tokens to signal your support or opposition. The more $ARB tokens you have, the more influence your vote will have. This is because the Arbitrum DAO's smart contracts are implemented such that votes are token-weighted, meaning that the power of a vote is determined precisely by the number of tokens the voter's wallet represents.
Note that $ARB tokens can be delegated to other wallets. This means that you can vote using your own $ARB tokens (those in your own wallet), but you can also vote using someone else's $ARB tokens as long as the owner of those tokens has delegated their voting power to you. Delegation is useful for DAO members who don't have time to commit to reviewing and discussing DAO proposals on a regular basis1.
$ARB was created with an initial supply of 10 billion. New $ARB can be minted at a rate of 2% of its supply per year at most, with the first of these mints becoming eligible on March 15, 2024. $ARB minting events are performed by the DAO via a constitutional proposal.
In summary, the $ARB token is a special-purpose digital asset that gives its holders the ability to vote on on-chain proposals that affect the operation and evolution of the Arbitrum DAO and the technologies it governs. Holding $ARB tokens allows you democratically shape the future of the Arbitrum ecosystem alongside other values-aligned and incentives-aligned token holders.
- See Delegates and delegation: A conceptual overview to learn more about this concept. See How to delegate your voting power to learn how to transfer the voting power of your $ARB tokens to a delegate of your choosing.↩