Arbitrum: The Rising Star

Were you aware that when it comes to Smart contract platforms, Arbitrum have reigns supreme with an impressive array of Stats?

• Arbitrum launched their ARB token on Thursday, leading to massive activity on the L2: +2m daily transactions, +950k DAUs, & ~$1.8m in 24h fees​

• 1.9 million Smart contracts created

• 164 million cumulative transactions

• 3.4 million total users (including 500k new accounts created since the Airdrop)

• 869k daily transactions

• 571 million dex volume

This week, the highly anticipated ARB airdrop left many individuals pleasantly surprised, with some even receiving 4 or 5 figures in ARB tokens. As expected, the event caused a surge in on-chain metrics, resulting in the temporary crash of both the Arbitrum and Arbiscan website.

Hello, World!

While Ethereum and Binance Smart Chain continue to lead the way in on-chain metrics and growth, Arbitrum's journey began in late 2021 with a tweet that sparked an idea. Little did anyone know that this chain would eventually cause a historic airdrop clash, resulting in the temporary shutdown of both the project site and explorer. Despite the unexpected hiccups, Arbitrum has shown immense potential and has quickly gained popularity within the blockchain community, with significant growth.

Blockchain Active address over time

Arbitrum Daily Active address:

Contracts Deployed on Arbitrum

On-chain DEX volumes soared to record highs during the USDC depeg, with over $25 billion in aggregate volume. Interestingly, the majority of this activity and growth has been on Arbitrum, which has become the second-largest ecosystem in terms of DEX activity, trailing only behind Ethereum.

In the past 30 days, Arbitrum's DEX volumes have surpassed those of the next largest emerging ecosystem, Polygon, by a factor of two. Additionally, Arbitrum's DEX volumes are nearly seven times larger than that of Optimism, the third-largest ecosystem in terms of DEX volume.

Uniswap remains the leading DEX on Arbitrum, accounting for almost 60% of the total volume share. However, there has been a healthy influx of emerging DEXs on the platform, which have contributed significantly to the recent volume growth in the ecosystem.

Arbitrum's Total Value Locked (TVL) has recently been strong and sticky, especially when compared to Ethereum, which has seen a decline of 40% in TVL. On the other hand, Arbitrum's TVL has increased by 31% on a weekly basis, making it the only chain to show consistent growth in TVL. currently sitting around $2.5billion. The launch of the $ARB airdrop has also contributed to potential spikes in DEX volume, TVL, and user transactions on the Arbitrum chain. This increased activity is a clear indication of the platform's massive adoption by users.

The significant increase in debt share for emerging ecosystems such as Arbitrum can be attributed mainly to Radiant, which has been instrumental in driving Arbitrum's growth. Radiant has increased its TVL by almost five times since the beginning of the year, growing from $100 million to almost $500 million in locked capital, including borrows. This substantial growth in TVL has undoubtedly contributed to the overall increase in debt across the ecosystem.

When we consider only the base APY, Arbitrum boasts the highest earning pools amongst all other chains.

In addition to the impressive growth in TVL and DEX volumes, Arbitrum's recent launch of the Arbitrum DAO and the ARB token is a significant milestone in the decentralization of Layer-2 scaling solutions. The introduction of a governance module along with Arbitrum governance represents a significant step forward in terms of decentralized decision-making and community involvement.

The Airdrop:

There have been many calculations made regarding the potential value and valuation of the $ARB airdrop, but these have not always come to fruition. Regardless of the price it eventually reaches, the main question is when to sell: is it better to sell early, or is it worth the wait?

Nearly 84% of ARB tokens have been claimed by 600k users/wallets, with 15% remaining to be claimed. On average, users have claimed 625 ARB tokens.

The majority of users dumped their ARB airdrops at the peak price, leading to selling pressure that caused the ARB token's value to drop from $1.54 to $1.14. According to data from Dune, 93% of holders were selling at the launch of the airdrop, having dumped their tokens at the top of the market price. However, as the percentage of claims increased, the selling pressure gradually decreased, resulting in a reduction in slower sell pressure.

Assuming an average claim of 625 tokens made by users (although some may have claimed significantly more), the growth of the tokens since the airdrop launch can be estimated. Based on a rough average, the value of the airdrops increased to $1000, but most users who hunted for airdrops dumped them, leading to sell pressure and a decline in price to $1.14. Currently, the 625 tokens claimed in the airdrop are worth nearly $700 at the moment.

While sell pressures are normal during airdrop launches, as users tend to market sell the free tokens they receive, it can create selling pressure on the token's value. However, over time, as the initial selling pressure eases and more users start to claim their airdrops, the market stabilizes, and the token's value increase again.

Don’t Sleep on This Sleeping Giant

In conclusion, it's important not to underestimate the potential of Arbitrum, which appears to be a sleeping giant in the space. The ecosystem boasts an active community of users and developers, high transaction volumes, significant hype, and support from one of the most influential exchanges in crypto. With time, it's highly probable that we will witness a number of massive applications emerging from this promising ecosystem, cementing its position as a major player in the blockchain industry.