How did the Arbitrum (ARB) Airdrop go — All you Need to Know about one of the Biggest Airdrops of the Year
Have you recently seen a lot of Arbitrum-related news in the media? No wonder, this project has just seen an airdrop, which was all around the place. It was one of the most anticipated events of the Ethereum community and its layer-2 solutions.
How did it go and what do you need to know about this event? This and many more will be explained in the following few paragraphs.
What is Arbitrum (ARB)?
Before we look into the details of Arbitrum airdrop of the ARB token, let’s briefly look at what the project tries to solve. Arbitrum is a layer-2 blockchain that is built on top of Ethereum. It uses optimistic rollup technology, through which it aims to improve mostly the scalability of the Ethereum ecosystem.
This would lead to decrease of transaction fees as well as the increase of the speed of transactions. Another beneficial outcome would be an improvement of security of the Ethereum network, which is also something that Arbitrum aims to do.
Arbitrum also plans to expand Ethereum smart contracts capability. This would be done thanks to improving the above-mentioned features such as scalability or speed, while still ensuring the best possible privacy. It is currently estimated that only this layer-2 protocol, and Ethereum has several others, is capable of processing 40,000 transactions. The main chain is currently estimated to be able to process about 14 transactions per second, with the fees remaining relatively high compared to layer-2 solutions.
While in the past couple of weeks it has mostly seen attention thanks to the anticipation of the airdrop, the project has been on an increasing trajectory for some time. Its total value locked (TVL) on all exchanges has been rising significantly, with several popular decentralized exchanges (DEXes) such as GMX, leading the race.
What is an airdrop?
A quick recap of what Arbitrum is behind us, but let’s also look at what an airdrop is. Airdrop is an event, during which a project decides to send tokens or coins directly to cryptocurrency wallet addresses of eligible users. What determines whether the user is eligible or not is based solely on the rules of the given airdrop and is usually determined by the team.
Usually, when the airdrop happens, the crypto project will select which wallets are eligible to receive their tokens. This can be based on activity, participation in the network or community. Most of the time, the users receive the tokens for free or for some form of retweet or reshare on social media.
The main reason why airdrops happen is to spread the token between the users so that they are distributed. This can help with the decentralization of the token supply and speed up the whole adoption process as users can be motivated to join the network to receive “free money.” It can also help to boost the circulation of the token, its trading volumes and liquidity.
Who was eligible for the Arbitrum airdrop?
So, who was eligible to receive the airdropped tokens from Arbitrum? Just like any other airdrop, the ARB airdrop had few rules, according to which the users either received the tokens or not. Those who were eligible had to fulfill at least one of the following:
- Bridge transactions into Arbitrum
- Aggregate value of transactions
- Number of months in which transactions were made on Arbitrum
- Number of transactions made or smart contracts interacted with
- Activity on Arbitrum One or Arbitrum Nova
The individuals received tokens based on how many rules they fulfilled. The more rules that were satisfied, the higher the airdrop they received. Some of these even went more in depth. For instance, if the user completed transactions over 9 different months, they received more tokens than someone who made them over three months.
Moreover, to make sure that no malicious activities applied to the airdrop, there were two other rules that stopped the users from receiving the airdrop. These were:
- Completion of all the qualifying transactions in less than 48-hour period
- Holding of less than 0.005 ETH on the user’s wallet that interacted with no more than one smart contract
These rules made sure that the airdrop would not be prone to Sybil attacks and thus were named anti-sybil rules.
All you need to know about Arbitrum airdrop
The airdrop took place on 23rd of March. More than 42 million ARB tokens were claimed right at the first hour when the airdrop went live. At that time, about 23,000 different wallets claimed the airdrop, which represented about 3% of all the eligible wallets.
The ARB token, which was distributed during the airdrop, is going to serve as a governance token. It will permit its holders to vote on different decisions connected to the protocol. This will be done through the DAO. The airdrop of the ARB token is the official transition of this protocol to decentralized autonomous organization (DAO).
The ARB token, with the 10 billion token supply, is expected to be distributed as follows in the coming years after the airdrop happened. 56% of all the supply should be in the control of the community, with 11.5% being airdropped to the eligible wallets. About 1.1% of the supply is expected to be in the hands of different DAOs that will be in charge of the Arbitrum ecosystem.
The second part, 44% or about 4.447 billion tokens has been distributed to the employees and investors of Offchain Labs, the company behind the development of Arbitrum. Their tokens, however, are subject to a lock-up period. In this case, it is a 4-year lockup with the first unlocking happening one year after the airdrop — 23rd of March 2024. Following that, the unlocks will happen on a monthly basis, with the last occurring on 23rd of March 2027.
How did the airdrop go — two sides to the coin
The success (or failure) of this airdrop can be evaluated mostly from two different data points. These are the number of unique addresses of Arbitrum and the price of the ARB token. Yet, they each tell a completely different story.
When looking at the number of unique addresses, people around Arbitrum and its ecosystem might feel very bullish. The chart clearly shows that there are more and more unique addresses being created every day. The number did not stop after the airdrop, but rather it seems to have even sped up.
However, the price of the ARB token shows a completely different sentiment. The price was the highest right at the moment of the airdrop, when the token was selling for about $11. Yet, its price then almost fell down in a straight line by more than 90% and is currently trading for several days at almost the same level of $1.00 — $1.30. Additionally, many expect this to continue and even though the price stabilized, they still believe that more selling pressure might come.
Thus it seems that while the number of people joining the Arbitrum ecosystem is growing, the holders of the token and especially the buyers of it, are in deep losses. It can only be assumed that a small number of very skilled and successful traders and scalpers made profit in the first few minutes of the airdrop.
Conclusion
The Arbitrum airdrop was one of the most important layer-2 events on the Ethereum network this year. It was also one of the most anticipated airdrops in crypto space in a while. Whether this was a successful or not successful airdrop depends on how one looks at it. However, only time will show whether this step from the Arbitrum team was prosperous for the community and the future of the project as well.
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