Dolomite Launches vARB Token for Governance Voting on Arbitrum
DeFi protocol Dolomite announces the release of vARB, a token that enables holders to engage in Arbitrum governance by voting, while the original ARB token remains locked.DeFi platform Dolomite has launched vARB, offering ARB holders dual functionality.
DeFi protocol Dolomite has introduced a new token called vARB, which stands for “vote-enabled ARB.” This token allows holders to actively participate in governance voting on the Arbitrum network. While vARB cannot be lent, borrowed, or traded like ARB, it provides users with the ability to use their ARB collateral to vote on important decisions.
What Is vARB?
vARB is not an entirely new asset; rather, it functions as an extension of the existing ARB token. Unlike ARB, vARB is non-transferable and non-tradable. According to Dolomite, vARB exists solely for the purpose of facilitating voting rights on the Arbitrum network. Holders cannot engage in lending or borrowing activities with vARB.
Unlocking Voting Power
The main advantage of vARB lies in its ability to unlock the voting power of ARB collateral. ARB tokens locked in liquidity pools or used for lending and borrowing are currently ineligible for governance voting. However, vARB allows users to convert their ARB to vARB, subsequently enabling them to participate in voting on the Arbitrum network. This feature ensures that ARB holders can make use of their tokens for both governance participation and financial transactions.
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Furthermore, vARB offers an additional benefit: amplifying the weight of votes. Through a unique mechanism, vARB holders can deposit vARB as collateral and borrow more ARB. This borrowed ARB can then be swapped for vARB up to five times. Notably, the value of vARB remains equivalent to that of ARB, protecting holders from the risk of liquidation due to price volatility.
Dominance of Arbitrum
Arbitrum has established itself as one of Ethereum’s leading Layer-2 networks, experiencing significant growth and adoption. The network successfully launched its native ARB token in March and currently boasts a Total Value Locked (TVL) of over $2.4 billion as of December 28, 2023. This recent surge in ARB’s price, which rose by more than 32% in the past week, has led analysts to predict a potential surge to $2.
🤔 Q&A: What Else Do You Need to Know About vARB and ARB?
Q: Can I trade or transfer vARB? A: No, vARB is non-transferable and non-tradable. It is solely used for governance voting on the Arbitrum network.
Q: How can I convert my ARB to vARB? A: To convert ARB to vARB, you can deposit your ARB as collateral and borrow additional ARB. You can then swap this borrowed ARB for vARB, amplifying your voting power.
Q: What is the value of vARB compared to ARB? A: The value of vARB remains the same as ARB. Holders do not face the risk of liquidation due to market price fluctuations.
Q: Can I use ARB locked in other DeFi protocols for governance voting? A: Currently, ARB locked in liquidity pools and used for lending and borrowing is not eligible for governance voting. However, vARB solves this problem by allowing users to participate in voting with their ARB collateral.
Q: Why is the price of ARB rising? A: The price of ARB has experienced significant growth recently, rising by over 32% in the past week. Analysts foresee a potential surge to $2, reflecting increasing optimism and market demand.
🌐 References:
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