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On March 16, the Arbitrum Foundation announced the long-awaited release of the ARB token. We explain why this event is of such great importance and what impact it can have on the crypto market.
The community was waiting for the release of ARB six months earlier
Arbitrum is the largest layer 2 Ethereum scaling solution. It accounts for more than half of the L2 market, and the market capitalization of projects on Arbitrum exceeds $3.3 billion.
Optimism, the second largest L2 network, released the OP governance token in May 2022 – since then, members of the crypto community have been actively discussing the possible timing of the appearance of the Arbitrum token on the market. There were rumors that this would happen in the fall of 2022, but the collapse of Terra, the collapse of FTX and the bankruptcy of several other large companies delayed the launch by several months.
Read more about what Arbitrum is and how Ethereum second-tier solutions work in BeInCrypto.
The potential token giveaway has been one of the main reasons why crypto enthusiasts have been looking forward to the release of ARB. According to the Arbitrum Foundation, 10% of the total supply of the token will be allocated to the airdrop – while those who have been active on Arbitrum will receive more coins. Nansen, an analytics company, will help distribute ARB according to transaction volume, dApp usage, and time spent in the protocol. With a total supply of 10 billion and a currently unknown circulating volume, the value of each token could range from $0.1 to more than $1. Twitter users are already discussing the possible price of ARB with might and main.
Arbitrum airdrop is one of the first positive news in a long time
The long-awaited release of ARB is important for several reasons. First, it confirms that the team behind Arbitrum, Offchain Labs, sees current market conditions as positive. It is pointless to issue a token in a bear market, as users usually prefer to invest free money in safer and more stable assets.
Second, 1% of ARB’s total supply is dedicated to Decentralized Autonomous Organizations (DAOs) that are part of the Arbitrum ecosystem, such as Jones DAO, Plutus DAO, Camelot Exchange and GMX. All of them will be rewarded in ARB tokens and then either leave them in the DAO treasury or use them as rewards for DeFi users.
Finally, the release of ARB will allow crypto market participants to invest in the largest and most successful L2 blockchain. Arbitrum is considered a serious competitor for Tier 1 solutions and could take a large share of the market from networks such as Solana, Polygon and Avalanche.
Thus, the release and airdrop of ARB is one of the first good news in the crypto industry for a long time. Amid concern over regulatory action, decoupling the USDC stablecoin from the US dollar, and the ongoing fallout from the FTX crash, the project team’s confidence in the token’s launch is definitely taken as a positive sign for the entire Web3 space.
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