Arbitrum’s ARB Token Faces Pressure Amidst Supply Concerns

In a recent development, GSR Markets withdrew 7.91 million ARB tokens, worth $4.38 million, from Coinbase.

Historical transaction data suggests that these tokens will be replenished after a brief period. However, ARB’s struggles continue, with the token hitting an all-time low of $0.43 and plummeting 43% year-to-date.

The Arbitrum community’s approval of a temperature check proposal to introduce ARB staking offers a glimmer of hope. This added utility could incentivize holders to retain their tokens, while attractive APYs may lure yield farmers. Nevertheless, the primary culprit behind ARB’s weakness is its supply dynamics.

How Steady ARB Token Unlock Has Affected Holders 

A steady stream of token unlocks has taken a toll on ARB holders. On August 16, 92.65 million ARB tokens (2.77% of the circulating supply) were released for team members and investors. Another identical batch is slated for September, with more to follow in the coming months. This has led to criticism of ARB’s “low float, high fully diluted valuation” model, which some retail investors deem uninvestable.

Furthermore, the impending ARB staking and fee sharing mechanisms are facing scrutiny. Although the community has shown interest, the final proposal won’t be presented until October, leaving the token’s future uncertain. As ARB continues to navigate these challenges, its performance among the top 100 cryptocurrencies remains underwhelming.

Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.

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Source: https://nulltx.com/arbitrums-arb-token-faces-pressure-amidst-supply-concerns/