Arbitrum is a layer2 scaling solution that supports smart contracts without the limitations of scalability and privacy. Founded in 2021 by Offchain Labs, Arbitrum is a solution that provides a more lasting solution to the fees that building DApps on Ethereum would ordinarily cost.
Anyone who builds smart contracts knows that Ethereum is the most popular and effective platform to build decentralized applications. However, aside from on-chain solutions such as tweaks and upgrades that many have believed to be the solution to the problems associated with the congestion of the network, some have also believed in the abilities of second layer solutions to reduce transaction costs.
Second layer solutions are a group of solutions constructed on top of a public blockchain to increase its scalability and effectiveness, particularly for small transactions or operations. They are also commonly referred to as Layer 2 solutions. It aggregates batches of transactions using the technology of optimistic rollup to reduce the cost of gas. Moreso, arbitrum as a Layer 2 solution seeks to reduce transaction speed and reduce gas fees that accrue from using Ethereum Mainnet (Layer 1)
Since Off Chain Labs launched Arbitrum in August 2021, many have anticipated the launch of the Arbitrum token. Luckily and to the ecstasy of many investors, the Arbitrum Foundation in conjunction with Offchain Labs just announced the airdrop of a governance token for Arbitrum.
The $ARB airdrop would officially be live on the 23rd of March, 2023.
Arbitrum’s Tokenomics
Overview of the $ARB Token Supply and Distribution
What many are intrested in is how much of this token will be supplied and how it is going to be distributed. Coins will be airdropped to the Arbitrum DAO treasury, Offchain Labs (the company behind Arbitrum), Offchain Labs investors, users of the Arbitrum platform, and DAOs that are building with the Arbitrum L2 technology.
The distribution of Arbitrum ($ARB) is as follows:
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17.53% (1.753 billion tokens) is allocated to Offchain Labs Investors
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1.13% (113 million tokens) is allocated to DAOs in Arbitrum Ecosystem
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11.62% (1.162 billion tokens) is allocated to users of the Arbitrum platform (via airdrop to user wallet addresses)
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42.78% (4.278 billion tokens) is allocated to Arbitrum DAO Treasury
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26.94% (2.694 billion tokens) is allocated to Offchain Labs Team and Future Team + Advisors
According to the Arbitrum website：
https://docs.arbitrum.foundation/airdrop-eligibility-distribution
12.75% of the $ARB token supply will be airdropped on 23 March 2023, with 11.62% allocated to users and 1.13% to DAOs. The initial supply of $ARB token is 10 billion with an inflation rate capped at a maximum of 2% per year.
These token distributions are intended to establish a varied and dispersed stakeholder network, supporting a decentralized environment.
Governance
Alongside the announcement of the launch of $ARB, the Arbitrum foundation announced the launch of a self-executing DAO governance model for the Arbitrum One and the Arbitrum Nova networks. The $ARB airdrop will be distributed to eligible Arbitrum ecosystem participants, and claiming begins on March 23.
Being the first L2 solution to introduce self-executing governance, Arbitrum feels the initiative is "leading the way." However, when compared to ETH, which is used to pay Ethereum (and Arbitrum) fees, the $ARB token will solely be employed for protocol governance.
Arbitrum's DAO governance is self-executing, which means that its votes will directly influence and carry out on-chain decisions without the need for a middleman. Before a proposal may be implemented, the voting process must take place for a minimum of 21–37 days, giving people enough opportunity to respond to any modifications.
The Arbitrum Foundation also created the Arbitrum Security Council, a multisig of 12 "highly esteemed community members" who would keep an eye on the chains' security and be able to take quick action should a weakness be discovered. If the DAO determines the chain no longer requires the Security Council at any point, it may also retire it.
Hence, the governance of the token is quite decentralised and allows for decentralised and fast decision making. Also, the Arbitrum Foundation claims that with the introduction of $ARB, Arbitrum has transformed into a decentralized autonomous organization (DAO). As a result, holders of $ARB will have the ability to vote on important issues affecting the networks known as Arbitrum One and Arbitrum Nova, which enable quicker and less expensive transactions on the Ethereum blockchain.
ARB Token Value Proposition
Why $ARB? You might ask.
Arbitrum isn’t the only Layer 2 solution that is available for the Ethereum blockchain but as you might have guessed Arbitrum tops them all. Solutions like Polygon and Optimism offer benefits but nothing beats the Optimistic Rollup and more importantly the scalability boosts band privacy features.
Developers can use it to execute unaltered EVM contracts and Ethereum transactions on a second layer, utilizing Ethereum to guarantee accuracy and gain from its superior security. The system has established itself as the dominant player among Layer 2 scaling options for Ethereum. According to Footprint Analysis, it was responsible for 50.88% of the entire Layer 2 value locked as of June 2022.
Potential Growth and Adoption of Arbitrum and its Impact on ARB Token Value
The Arbitrum protocol's native token, Arbitrum, will begin trading on major cryptocurrency exchanges on March 23, 2023. There is a lot of speculation about how the token's price will behave, as there is with any new launch.
With a maximum anticipated price of $2.32 and a lowest predicted price of $1.35, the price of ARB is predicted to rise steadily throughout the year in 2023, starting at about $1.10 in March and peaking at $2.32 in September. Nonetheless, the price of the ARB token may be quite volatile in the initial months.
Crypto Bulls Club predicts that if both the user and DAO supply opens, the listing price for $ARB will be at $0.60. They claim that this prediction is based on a total circulating supply of 1.275 billion $ARB tokens.
However, if only the user Airdrop opens, and the DAO treasury, the advisors and their team have their tokens locked up, there would be a shorter supply of tokens leading to a higher price of around $0.66
Additionally, the token is anticipated to have considerable growth in price in 2024, with a maximum price of $7.04 and a minimum price of $5.41 by the end of the year, according to the ARB price projection. Several elements, including the growing adoption and usage of the Arbitrum ecosystem and the general bullishness of the cryptocurrency market, can be credited for this growth.
ARB token prices are likely to climb as more people start to use the Arbitrum system and demand for them rises. The value of the token might also rise when more institutional investors and significant crypto exchanges start to recognize the potential of the Arbitrum network.
Airdrop Claim Rules and Methods
User Airdrop Eligibility
The Arbitrum token airdrop will begin on March 23, 2023, so be sure to mark your calendar.
The magnitude of each user's airdrop and the users who would be eligible for it were both determined by a set of criteria created by Arbitrum. The qualifying actions for airdrops generally include;
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bridging transactions into Arbitrum,
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the number of months in which transactions on Arbitrum were made,
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the total number of transactions or interactions with smart contracts, the aggregate value of transactions
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activity on Arbitrum One and Arbitrum Nova.
More specifically however, there are qualifying actions to earn you points on both Arbitrum One and Arbitrum Nova. To qualify to earn points on Arbitrum One, these are the required and qualify actions;
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Bridged funds into Arbitrum One
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Conducted transactions during two distinct months
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Conducted transactions during six distinct months
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Conducted transactions during nine months
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Conducted more than four transactions or interacted with more than four different smart contracts
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Conducted more than ten transactions or interacted with more than ten different smart contracts
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Conducted more than 25 transactions or interacted with more than 25 different smart contracts
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Conducted more than 100 transactions or interacted with more than 100 different smart contracts
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Conducted transactions exceeding in the aggregate $10,000 in value
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Conducted transactions exceeding in the aggregate $50,000 in value
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Conducted transactions exceeding in the aggregate $250,000 in value
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Deposited more than $10,000 of liquidity into Arbitrum
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Deposited more than $50,000 of liquidity into Arbitrum
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Deposited more than $250,000 of liquidity into Arbitrum
For Arbitrum Nova, these actions qualify users to earn points;
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Bridged funds into Arbitrum Nova
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Conducted more than three transactions
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Conducted more than five transactions
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Conducted more than ten transactions
Each point scored is equivalent to a number of tokens during the airdrop.
Each criterion is further divided into bands, with higher bands giving larger airdrops. For instance, carrying out transactions over nine different months would qualify for a greater airdrop than doing so simply over two different months under the "Transactions Over Time" requirement.
A recipient of an airdrop is ineligible if their wallet address is discovered to be a Sybil address during the Hop protocol reward program.
Other anti-Sybil rules are adopted as follows;
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One point is deducted if an airdrop recipient's wallet transactions all took place within the previous 48 hours.
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One point is deducted if an airdrop recipient's wallet balance is less than.005 ETH and the wallet hasn't engaged with more than one smart contract.
On the official website of the Arbitrum Foundation, users can verify the requirements they have met and the airdrop they have been assigned. Users might think about centralized exchanges (CEXs) in addition to the numerous DEXs on Arbitrum if they want to sell their ARB tokens. Several CEXs, including Binance, ByBit, OKX, KuCoin, and others, have declared that they will list ARB on the day of introduction.
DAOs Airdrop Criteria and Distribution
The Protocol Guild, a group of Ethereum contributors, and DAOs that are developing apps in the Arbitrum ecosystem will each receive a unique distribution. The allocation of tokens to DAOs was weighted depending on a number of variables, including the length of time that a project had been on Arbitrum, the total value of its assets on the chain, its nativeness to Arbitrum, and if it had true on-chain treasuries.
Regarding individual DAO allocation, additional information will soon be added. Moreso, all investor and team tokens are subject to 4 year lockups, with the initial unlocks occurring in one year and then monthly unlocks for the following three years, even though the user and DAO airdrops will be available in a few days.
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Step-by-step Guide on How to Claim ARB Tokens
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Step 1: Check if you qualify for the ARB airdrop.Before claiming ARB tokens, you need to make sure you are eligible for the airdrop. Check the qualifications listed above and on the official website.
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Step 2: Get an ARB wallet.To claim ARB tokens, you need to have a wallet that supports ARB. You can use any wallet that supports the ERC-20 token standard, such as MyEtherWallet or MetaMask. Make sure you have control of the private keys to the wallet.
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Step 3: Follow the airdrop instructions The ARB token has not yet been launched but the airdrop rules have been dropped in preparation for the launch. Follow the instructions provided by the project team to claim your ARB tokens.
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Step 4: Wait for the airdrop distribution.After submitting your information, wait for the airdrop distribution. The distribution date and method will be announced by the project team.
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Step 5: Verify your ARB tokens.Once you receive your ARB tokens, verify that you have received the correct amount. You can check your wallet balance or use a blockchain explorer to view the transaction history.
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That's it! Congratulations, you have successfully claimed your ARB airdropped tokens.
Conclusion
In conclusion, understanding tokenomics is crucial for both investors and users when it comes to participating in the ever-evolving DeFi ecosystem. As highlighted in this article, the ARB token offers an exciting opportunity for those looking to invest in a promising new blockchain technology. Its unique features such as low gas fees, fast transaction times, and interoperability with other blockchains make it an attractive option for users as well.
However, it is important to note that investing in any cryptocurrency involves risk and should be approached with caution. It is important to do thorough research and understand the underlying technology and the project's goals before investing.
Looking forward, the potential of the ARB token value is significant, given its association with the rapidly growing Arbitrum network. As more users and projects adopt Arbitrum, the demand for ARB tokens is likely to increase, potentially driving up its value.
Overall, the emergence of the ARB token and the Arbitrum network marks an exciting milestone in the DeFi ecosystem. Its unique features and potential for growth make it a promising investment opportunity for those looking to participate in the world of decentralized finance. As the DeFi space continues to evolve, it will be interesting to see how Arbitrum and other similar projects will shape the future of finance.
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