Positive data on the Arbitrum network

Arbitrum’s airdrop on 23 March 2023 unquestionably raised the share of on-chain assets in the network by bringing in capital from the Ethereum blockchain.

More than 2 months later, although attention to layer 2 infrastructure has waned, much of the data has remained incredibly positive.

We delve deeper in this article.

Arbitrum: data on transactions and daily active users remain positive after the airdrop

Arbitrum benefited quite a bit from the marketing strategy it chose, namely the airdrop technique, to distribute its native token to the community: in the months leading up to the announcement of the ARB token release, a lot of capital flowed from Ethereum and other chains to Arbitrum.

Users devoted themselves to exploring the chain and the various protocols with a view to being rewarded with an economic return from airdrop, leading Arbitrum to record a TVL of $2 billion in March.

Indeed, it is well known that this methodology of introducing an ecosystem token brings a great deal of activity and capital into an infrastructure in the days leading up to user rewards.

What remains most interesting is the observation of network data months AFTER the airdrop release, to monitor whether users landed in the chain earlier, stayed or ran away once they received the swag.

In the case of Arbitrum, although there has obviously been a downward decline in on-chain data, the state of the network remains strong.

In particular we can observe a number of daily active users on the layer 2 solution that remained very high 2 months after the airdrop.

Comparing the trend with Ethereum and Optimism, respectively the main network it relies on and one of the zk competitors that adopted its same strategy months earlier, we see that users have not fled from Arbitrum but have continued to swarm in the on-chain environments.

Another item of great interest concerns the number of transactions actually executed on the network.

The day of the airdrop claim, 23 March, saw an incredible amount of transactions of about 2.5 million only to drop immediately the next day.

In any case, in the weeks that followed, we saw high activity on the network, occasionally even surpassing the numbers recorded by Ethereum.

Comparing the figure to the previous period of ARB token distribution, the metrics show great growth in this regard.

Arbitrum network on the rise in recent months: network fees, transacted volume, and bridging from L1

Following the March airdrop, Arbitrum also benefited on other fronts, such as the number of fees recorded, volume transacted, and the amount of value bridged from L1.

Going in order we can see how from mid-April to mid-May the fees paid to Arbitrum to process transactions were surprisingly high.

In addition, the gas spent in June by users is still higher than the amount recorded in early March. It is also interesting to note that nearly 1,000 ETH was paid in the form of fees on the day of the claim.

On the volume side, the data are less encouraging than those mentioned so far, as the chain witnessed a significant decrease in the volume transacted on the network after a few weeks away from the airdrop.

However, the current values are higher than those for the pre-March period.

Specifically, on the day of 5 June, 74 days after the distribution of the ARB token, the Arbitrum network marked an on-chain volume of $2.4 billion, a figure that has never been reached during any single day in February.

On 19 April there was the ATH of this metric with token transfers amounting to a whopping $24 billion.

Finally, the last data point worth reflecting on concerns the change in volume that was processed by bridges to land on Arbitrum.

Very unexpectedly, cross-chain activity between Arbitrum and the other compatible EVM networks has been consistently high, ranking second behind only Polygon.

In March, the amount of assets transferred on the network peaked, yet continued to register significant numbers even months later.

Most likely in all this is also the contribution of Stargate and the narrative of LayerZero’s future airdrop, which will likely reward users who have generated volume on the cross-chain exchange platform.

Overall, the Arbitrum airdrop was a success for the network in the months that followed. 

Despite the fact that many users who received the reward have done nothing more than sell the ARB on the market and move to the Ethereum network, many others have remained on layer 2 demonstrating that there is interest in the infrastructure beyond opportunistic interests.

To date, those who received airdrop contribute 5% on the number of tx processed by the chain, which is in line with the numbers that Optimism reports.

ARB token price analysis

On the price side, the native layer 2 Arbitrum token has also remained all in all strong since the airdrop announcement.

Typically, when large amounts of cryptocurrency are released to early adopters in a community, those early adopters tend to dump most of it for profit in stablecoins.

The Arbitrum team has been good on the tokenomics front in finding a solution that would not cause the ARB token to be overly devalued.

Indeed, there is currently 12.75% of ARB in the market as circulating supply compared to the max supply set.

Thus, while experiencing large sales from airdrop opportunists, the asset has maintained a solid price structure.

The current trend still remains bearish, but it must be contextualized in a condition of economic uncertainty and a complex situation on the US regulatory front.

The fact that the Arbitrum token has remained above the dollar so far represents a success story that should not be underestimated.

Many other crypto assets that do not suffer from particular selling pressures dictated by these marketing strategies have marked much more violent and problematic declines.

ARB currently trades at a price of $1.009 per piece, a market capitalization of $1 billion, and a trading volume in the last 24 hours of around $234 million.

Most likely, as soon as Bitcoin’s dominance begins its bearish phase and we see more reassuring scenarios in the United States, ARB will surpass its all-time high set at $1.82.

Meanwhile, the chain’s TVL remains staggeringly high at $2 billion, making the network rank as the fourth-largest chain by assets circulating within smart contracts.

The future for both the Arbitrum network and the ARB token is extremely bright.