What is ARB used for?

ARB is the governance token for the Arbitrum ecocystem of protocols. The ARB token is intended to help bridge the gap in the interim as the rollup progresses toward full decentralization. Upgrades to the Arbitrum rollup are still necessary, as was seen in 2022 when Arbitrum was upgraded to the Nitro stack, which included improved compression, lower fees, and increased throughput. Upgradeability is also needed to patch any smart contract vulnerabilities. The launch of ARB shifts the access controls away from the core team (Offchain Labs) and instead to the Arbitrum DAO. The Arbitrum DAO is responsible for managing both the governance protocol and the technologies that the DAO governs, including the Arbitrum One and Arbitrum Nova chains. Arbitrum's DAO governance is self-executing, which means that all voting is conducted on-chain without an intermediary required to carry out these decisions. Users have substantial time to react to any pending changes as the voting process takes a minimum of 21-37 days to pass before it can be executed.

ARB tokenomics

ARB launched with an supply cap of 10B tokens with a 2% annual inflation rate thereafter. The token supply allocation includes ~43% reserved for the Arbitrum DAO treasury, 27% for Offchain Labs team, 18% for Offchain Labs investors, 12% airdropped to eligible users, and 1% to active DAOs building on Arbitrum. All investor and team tokens are subject to 4 year lockups, with a 1 year vesting cliff following by monthly unlocks.

What is the Security Council?

The primary role of the Security Council is to address time-sensitive, critical risks that affect the interests of the DAO and its members. The Security Council consists of a 12-member council divided into two groups. Every six months, there are elections to fill the seats in these two groups. Every elected member's term lasts one year. In case of emergencies, the Security Council can act swiftly to upgrade contracts but is subject to a strong 9/12 multisig threshold. The council is also subject to the oversight and control of the DAO's members, who have the power to remove any malicious members if they are not acting in the best interests of Arbitrum.