Why is everyone waiting for the Arbitrum airdrop?

Offchain Labs, the developer of the Arbitrum ecosystem, announced the launch of its own ARB token, part of the offer of which will go to active users of the platform through an airdrop — the distribution of tokens by developers. The excitement around the distribution and the start of trading in the token arose after an example of a successful experience with its own asset from the main competitor of the project – Optimism, and the demand for the token was formed even before its listing on the exchanges, writes RBC Crypto.

The ARB token will be released on March 23, and users who have been actively using products in the Arbitrum ecosystem during the year will be able to apply for the distribution. The project itself is a so-called second-level blockchain for Ethereum, which makes it faster and cheaper to process transfers on the network. For understanding: if in Ethereum at the basic level there are about 14 transactions per second on average, then Arbitrum allows you to increase their number to 40 thousand with a multiple of a lower commission.

The founders of Offchain Labs are Princeton University professor Stephen Goldfeder and two of his graduate students. In 2021 the company attracted $120 million from Lightspeed Ventures and several well-known cryptocurrency venture funds at a value of $1.2 billion. Ethereum scaling projects have formed an entire industry around themselves, Arbitrum’s main competitors in this market are Optimism and Polygon solutions. The company behind the latter is Polygon Labs received venture funding totaling $450 million, and the project’s token under the ticker MATIC is in the top 10 CoinMarketCap rating in terms of market capitalization.

At Optimism in March 2022 invested Paradigm and Andreessen Horowitz funds, the project is estimated at $1.65 billion. In June of the same year, its developers released the OP token, similarly organizing its distribution by airdrop and further access to the leading crypto exchanges.

Demand before the start of trading

As part of the token offering, the company will create the Arbitrum Foundation and an associated Decentralized Autonomous Organization (DAO) to manage and grow the Arbitrum ecosystem. ARB token holders will be able to vote on DAO proposals, and, according to the developers, the governance process will be self-executing, that is, the votes of token holders can directly affect changes to the Arbitrum program code.

Of similar projects, it was Arbitrum that delayed the launch of the token the longest, although active “drop hunters” (those who participate in testing crypto projects with the expectation of receiving tokens in the future) were sure that a project of this magnitude would certainly repeat the experience of its closest competitors. Arbitrum’s meteoric rise in less than two years has made it one of the most popular layer 2 blockchains on Ethereum, with a market share of over 55%. According to DefiLlama, the total amount of assets (total value locked, TVL) locked in Arbitrum is $1.6 billion, which is almost double that of Optimism.

The capitalization of the native token of the Optimism project with the ticker OP exceeds $780 million, and its price has grown 2.5 times since the beginning of the year. Future investors are likely to expect similar financial returns from ARB. The listing of the token was announced by leading crypto exchanges, including Binance. Some of them have already begun trading in ARB futures and similar derivatives, which already have millions of dollars in trading volumes, although ARB itself will not be directly related to them and will be listed on exchanges as an independent asset.

In the thematic channels in Telegram and Discord, over-the-counter (OTC) trading of yet-to-be-existing tokens is already underway with offers from those who are guaranteed to receive them as part of the distribution. How informed According to Cointelegraph, one of the members of the OTC group, the average price of ARB on the OTC market is $0.5, and buyers expect to see the token rate at least $1 at the start of trading on exchanges.

Speaking to Fortune reporters, Goldfeder saidthat when the token was issued, the idea of ​​​​further decentralization of Arbitrum was in the forefront, and not just a thirst for profit and “a token for the sake of a token”. According to him, ARB will be needed only to provide holders with voting rights in the DAO. Ethereum will continue to be used to pay for transactions on the network. Transferring control to a decentralized organization, as envisioned by Goldfeder, will give Offchain Labs the opportunity to focus more on attracting developers and new users.

Who will receive tokens

The distribution of tokens helps to create a network effect and primary liquidity of tokens in the market. One of the recent examples of projects with a sensational airdrop was the Blur NFT marketplace, which quickly won market share and users from its largest competitor, OpenSea. A well-thought-out campaign with the distribution of tokens and the attraction of new traders played an important role in this.

Offchain Labs partnered with analytics firm Nansen to identify ARB recipients and filter out multiple fraud attempts and other scams by applicants. The amount of tokens received was influenced by the number of transactions in the ecosystem, the set of applications used on the Arbitrum blockchain, the duration of participation, and other factors. The transparency of the blockchain as a public registry of each user action allows you to fully verify the set of their activities.

The total turnover of ARB will be 10 billion pieces. The Arbitrum community will control 56% of the existing tokens: 11.5% of the supply is allocated for distribution via airdrop, another 1.1% will be received by existing DAOs in the Arbitrum ecosystem. The remaining community tokens will go to the treasury, controlled by the new DAO from the Arbitrum Foundation.

Another 44% of ARB will go to investors and employees of Offchain Labs. These tokens will be subject to lock-up periods and entitlement schedules, Goldfeder said. The share of ARB reserved for insiders is higher than for similar projects. In the case of Optimism, investors and developers got 36% of OP tokens.

According to him, Arbitrum has reached certain technical milestones that its main competitor has not yet reached.