As a decentralized organization championing the cause of “bringing lobbyism to DAO governance,” Lobby Finance has achieved a significant milestone by becoming the top Arbitrum (ARB) delegate. The news was announced by Arbitrum delegate Paulo Fonseca via X, previously known as Twitter, characterizing it as “the biggest governance move to date.” Lobby Finance seized control of the voting power of 20.54 million ARB tokens with a single on-chain transaction.
According to the governance data of Arbitrum, this development has positioned the decentralized lobby at the pinnacle among the DAO’s delegates. The organization presently controls the votes of 20.65 million ARB, which is equivalent to 0.2% of all possible votes.
To provide some context, the last two proposals garnered 210.65 million and 193.44 million votes, respectively. The current voting power of Lobby Finance is tantamount to 9.8% of the last vote and 10.67% of the preceding one.
Arbitrum enjoys the reputation of being one of Ethereum’s (ETH) top L2 protocols. The system typically processes over 1.5 million transactions daily, with a record-high of nearly 5.1 million recorded at the close of 2023. The Arbitrum DAO, a decentralized organization enabling ARB holders to vote, decides the changes made to the protocol. As per the DAO, one ARB equates to one vote.
Much like other DAOs, the Arbitrum DAO does not anticipate every token holder to stay updated with the proposals being voted on or to possess enough technical understanding of them. Consequently, the system permits users to delegate their votes to delegates who are compensated for comprehending and making informed decisions on the users’ behalf.
Lobby Finance was established to serve as one such delegate. However, it has gone beyond this role by launching a website that enables users to purchase votes and alter the proposal odds in favor of their chosen option. Users who delegate their tokens to the service are reimbursed.
The system has been deployed on other DAOs as well, with Lobby Finance controlling over 2.3 million votes in the Blast DAO, 190,000 in the ZkSync DAO, nearly 28,000 in the Optimism DAO, over 24,300 in the Manta DAO and 890 in the Scroll DAO. The selection evidently displays a preference for layer two protocols, with the Manta DAO decentralized finance (DeFi) protocol being the only outlier.
In its pitch to prospective delegators, Lobby Finance highlighted that it enables yield generation without token locking and assured that increased governance participation will result in higher token prices. The organization elaborated on the mechanism of vote buying: Customers can opt for an instant buy where votes are cast immediately or partake in an auction.
In auctions, customers fund two pools, and upon conclusion of the auction, votes are cast for the winning pool. Both pools allow participation from multiple users.
