Arbitrum’s governance token ARB has experienced a consistent downturn since its airdrop in late March, but its ecosystem continues to show healthy growth. A recent Nansen report reveals that Arbitrum activity has improved following the airdrop and has stabilized at a higher level than before. The daily active users, gas fees, and transaction count have all maintained consistent higher levels on the Ethereum rollup since April 2023.
The trading volume on Arbitrum-based decentralized exchanges paints a similar picture, displaying an increase after the airdrop. Furthermore, Nansen’s report shows that only about 5% of activity on the blockchain is attributed to ARB airdrop recipients, which indicates that Arbitrum has attracted more new users since the airdrop.
Potential catalysts for ARB’s upside include the upcoming Cancun-Deneb (Dencun) update on Ethereum in the second half of 2023. This update will feature EIP-4844 (Proto-Danksharding) which is expected to lower transaction fees on Arbitrum, thus enhancing the blockchain’s value proposition. Additionally, the Arbitrum Foundation recently revealed that it would pass on earnings totaling 3,352 ETH or $5.4 million, from its Sequencer, to the Arbitrum DAO. This revenue source for the DAO could potentially create yields for ARB holders if the community decides to direct rewards towards holders.
Nansen’s data indicates that “smart money” and funds that accumulated ARB after the airdrop still haven’t sold, which is a promising sign. However, ARB’s fate ultimately depends on factors such as the upcoming Dencun update on Ethereum and decisions made by the Arbitrum Foundation in directing revenue from the layer-2 rollup.
Although recent developments in the Ethereum network and the growth of active users in the Arbitrum ecosystem are positive, it’s essential for investors to conduct their own research and consider all potential risks before making any decisions.
Source: Cointelegraph
