3 - 5 minute read
Ethereum-based blockchain project Arbitrum has completed the distribution of more than $120 million worth of its arb (ARB) tokens to projects that were built on its network. In March, Arbitrum issued and airdropped its tokens to individual users based on their network activity and number of wallets. Airdrops occur when crypto projects send free tokens to their communities in a bid to encourage adoption. Projects that built on the Arbitrum network, such as perpetual trading protocol GMX and token launchpad Camelot, were eligible for the airdrop, receiving tokens in proportion to the number of smart contract deployments, users, and trading volumes, among other factors.
The airdrop has provided a multimillion-dollar stimulus to some projects, such as Vesta Finance, which was eligible for 2.7 million arb tokens, worth just under $6 million, despite holding only $3 million in its treasury. This can allow the project to sell the tokens to bolster its own development or even provide token incentives to users to further jumpstart activity. Other projects, such as yield rewards-focused PlutusDAO, said they will use their airdrop allocation in multiple ways to make the project stronger, without revealing specifics.
Arbitrum airdropped ~90.15M $ARB ($118M) to 131 DAO addresses 8 hrs ago.
— Lookonchain (@lookonchain) April 25, 2023
Here is the list (most addresses identified).👇https://t.co/YOBREpZaiNhttps://t.co/yfvVpxlRfE pic.twitter.com/Iok9YIbb1C
However, some projects decided to sell as soon as they received the tokens. Gaming-focused TridentDAO sold $175,000 worth of arb, or half the amount it received, through three addresses, inviting criticism from the community. On-chain data compiled by Lookonchain shows some 90 million ARB tokens, about $120 million at current prices, were sent to over 131 decentralized autonomous organizations, or DAOs. NFT marketplace TreasureDAO and GMX received the most at 8 million arb, or $12 million. These were followed by decentralized exchanges SushiSwap, Balance, Uniswap, Curve, and Dopex, which will each receive between 3 million and 5 million ARB tokens.
The airdrop has been viewed as a significant move by Arbitrum to encourage adoption and incentivize projects to build on its network. It has also highlighted the potential for airdrop farming, whereby large airdrops can be valued at thousands of dollars in effectively free money at peak. Traders should keep an eye on the projects that received the airdrop and monitor their activity and usage of the tokens. The airdrop may also have implications for the future market moves of the arb token, and traders should consider the potential opportunities or risks it presents.
The Bottom Line
Arbitrum’s completion of the distribution of more than $120 million worth of its arb tokens to projects that were built on its network has provided a significant stimulus to some projects and highlighted the potential for airdrop farming. Traders should monitor the activity and usage of the tokens by the projects that received the airdrop and consider the potential opportunities or risks it presents for the future market moves of the arb token.
