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Decentralization proponents are celebrating Arbitrum governance rejecting a proposal from Lido, the largest liquid staking provider, requesting a 4M ARB grant to fuel incentive programs.<\/p>\n
A week-long vote concluded<\/a> on Oct. 12, with 43.6% of delegated votes cast in favor of the proposal compared to 31.3% against and 25% abstaining \u2014 falling short of the 50% threshold needed to secure the grant.<\/p>\n \u201cI am proud that Arbitrum delegates voted against incentives for Lido on their network,\u201d tweeted<\/a> Superphiz, organizer of the ETHStaker community. \u201cThis is a win for our future.\u201d<\/p>\n \u201cDelegates to Arbitrum have sent a resounding message,\u201d said<\/a> Evan Van Ness, who runs the Week In Ethereum newsletter. \u201cArbitrum votes against providing incentives to Lido\u2026 The Ethereum immune system is waking up.\u201d<\/p>\n <\/a><\/p>\n Lido was among 29 projects that applied for a share of 50M ARB ($40M) up for grabs as part of Arbitrum\u2019s Short-Term Incentive Program (STIP<\/a>). The funds are earmarked to fuel incentive programs designed to attract and bolster Arbitrum adoption, and cannot be converted into other assets.<\/p>\n Voting closed<\/a> today, with governance delegates approving the majority of applications. GMX, a decentralized perpetuals protocol, received the largest allocation with 12M ARB, followed by the leverage DEX, Gains Network, with 7M ARB. Nearly 100 projects how now applied for STIP funding, with around 60% of applications passing.<\/p>\n Lido said<\/a> it would use the requested ARB to incentivize stETH liquidity paired with ETH and stablecoins on Aribtrum-based decentralized exchanges. The project added<\/a> that deeper liquidity could pave the way for native stETH minting on Arbitrum in the future.<\/p>\n The pushback against Lido stems from its dominant control over staked Ethereum, with Lido\u2019s validators currently commanding 31.7% of staked Ether, according to Dune Analytics. Coinbase is the second-largest with 4.4%.<\/p>\n Ethereum researchers warn that Lido could pose a threat to the network\u2019s decentralization if the figure surpasses 33%.<\/p>\n In a recent appearance<\/a> on the Web3 Builders podcast, Danny Ryan<\/a> of the Ethereum Foundation said any singular entity amassing a third of Staked Ether poses \u201ca systemic threat to Ethereum.\u201d<\/p>\nPushback<\/h2>\n
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