- Lido is considering a new proposal to use its ARB airdrop to enhance activity on Arbitrum.
- The proposal would see Lido accept its $1.2 million in ARB tokens and reward them to liquidity providers in wstETH pools.
- It could go to a vote later this week, and the result will have a bearing on LDO and ARB prices.
The Lido DAO community is set to vote on operational and strategic topics concerning how to claim and make valuable use of ARB tokens. More specifically, the vote will determine whether to accept Arbitrum’s airdrop and if the claimed ARB tokens could serve as emission rewards for incentivizing the adoption of wrapped staked Ether (wstETH) across the Arbitrum network.
In response to this airdrop, the Lido DAO rewards committee puts forward the following proposal. This proposal covers operational and strategic topics related to claiming and making productive use of the potential ARB tokens. This proposal will enable the rewards committee to pursue the continued growth of staking and the wstETH DeFi ecosystem on Arbitrum One (and beyond).
Lido’s Operational and strategic topics
Justin David Reyes, Lido’s head of decentralized finance (DeFi) business development and partnerships, submitted the proposal that precedes the vote on April 12. In his submission, Reyes suggested that liquidity providers (LPs) for the wstETH pools on Arbitrum be rewarded with ARB tokens.
According to marketing lead Kasper Rasmussen, the incentives program would operate similarly to how liquidity pools currently earn extra LDO rewards in addition to staking rewards, adding that the vote could take place within the week.
Lido to claim hundreds of thousands of ARB tokens
The deliberation comes almost a month after Arbitrum’s airdrop for its governance token, ARB, went live. The launch saw early adopters of the layer 2 (L2) scaling solution enjoy lucrative rewards, including some decentralized autonomous organizations (DAO) such as Lido, which played an enabling role in the growth and success of Arbitrum.
As a component of that airdrop, the Arbitrum Foundation has expressed that they are allocating a portion of the governance, via the ARB governance token, to communities that have played a role in the growth and health of the Arbitrum ecosystem.
A Google doc within Arbitrum Foundation’s governance documents reveals that Lido is entitled to claim up to 772,621 ARB tokens, translating to over $1.2 million at prevailing rates. Further, the proposal notes that 33,400 wrapped staked Ether has already been bridged to the Arbitrum ecosystem, with the cumulative number of wstETH transactions on Arbitrum now reaching over one million.
Based on the governance documentation, there are no specific conditions on the distribution of the said tokens, which leaves it in the hands of the Lido DAO network to determine how best to use the tokens in participating in the governance and growth of the Arbitrum ecosystem.
Possible impact of vote outcome on LDO and ARB prices
Meanwhile, Lido price (LDO) and Arbitrum price (ARB) are still experiencing a lack of directional bias and have been consolidating under formidable zones for weeks.
The outcome of the vote could catalyze a possible breakout for both Layer 2 tokens. For Lido price, a positive outcome could see LDO breach the immediate barricade at $2.63 and clear the path for a potential climb of around 15% to the next roadblock of around $2.92. The L2 token could tag the $3.27 hurdle in a highly bullish case, denoting a 30% upswing.
Regarding Arbitrum price, passing the proposal could restore ARBabove the $1.70 resistance level, paving the way for the altcoin to reclaim its local high of around $1.80. Such a move would constitute an uptick of about 10% from current levels.
LDO/USDT 1-day chart, ARB/USDT 1-day chart
Conversely, failure to pass the proposal could see Lido price drop toward the $1.96 swing low before a possible pullback. On the other hand, Arbitrum price could lose the critical support at $1.59, exposing the L2 token to a cliff that could send ARB down around 10% to $1.50.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
PENDLE price soars 10% after Arthur Hayes’ optimism on Pendle derivative exchange
Pendle (PENDLE) price is among the top performers in the cryptocurrency market today, posting double-digit gains. Its peers in the altcoin space are not as forthcoming even as the market enjoys bullish sentiment inspired by Bitcoin (BTC) price.
Ethereum shows signs of a potential rally as suspected Justin Sun wallet buys heavily
Ethereum's (ETH) recent price movement hints at a potential rally despite ETH ETPs recording outflows. The recent price improvement follows the fourth Bitcoin halving and a suspected Justin Sun wallet purchasing large numbers of ETH.
Floki poised for growth after listing on Revolut
Floki's (FLOKI) team announced in an X post on Monday that the meme coin would be listed on the popular neobank and Fintech platform Revolut. Floki could rise further following key partnerships to boost retail usage.
Jupiter DEX second Launchpad vote concludes, JUP price rises 5%
Jupiter, a Solana-based decentralized exchange (DEX) has completed the second launchpad (LFG) vote to identify the two projects that will debut on its platform. On March 30, the aggregator network had unveiled its Core Working Group (CWG) budget proposal voting.
Bitcoin: BTC post-halving rally could be partially priced in Premium
Bitcoin (BTC) price briefly slipped below the $60,000 level for the last three days, attracting buyers in this area as the fourth BTC halving is due in a few hours. Is the halving priced in for Bitcoin? Or will the pioneer crypto note more gains in the coming days?