Ethereum
Why did ARB drop by 68% in 7 months?
ARB, the native token of Ethereum layer-2 solution Arbitrum, is down 68% from its January 2024 highs.
However, there is good news: while ARB holders “suffer” in the face of relentless bears, positive on-chain developments reveal a platform that is not only the largest in terms of total value locked (TVL), but also full of potential.
Over 48% of Ethereum Bridged Assets End Up in Arbitrum
Taking X, an analyst Remarks an increase in user activity on Arbitrum and the platform leading on several key performance indicators (KPIs).
Importantly, the analyst observed that while there are other Ethereum Layer 2 solutions to choose from, including Base – which is backed by one of the world’s largest exchanges, Coinbase, and Optimism – over 48% of all assets tied to the mainnet find their way to Arbitrum.
Getting users to opt for Arbitrum, not Base or other competitors, is a huge confidence boost. It also indicates its technical ability to address the scaling challenges that plague the mainnet.
Beyond this dominance, the analyst, citing data from Token Terminal, also notes that Arbitrum, as mentioned, reigns supreme when it comes to TVL. According to the blockchain analytics platform’s on-chain asset flow, Aave, a lending and borrowing platform, is the top contributor.
Meanwhile, Arbitrum is the most active network, if we consider the number of daily active addresses. Measuring activity levels, the analyst notes that Arbitrum is even busier than the mainnet.
Interestingly, while activity may be a factor, Arbitrum, according to the analyst, is ahead of other Layer 2s in terms of the number of unique token holders. This indicates that Layer 2s are also ahead in terms of depth and breadth, which indicates high engagement.
Will ARB rise after falling 68% in 7 months?
Given these impressive on-chain stats, it remains to be seen when ARB will recover. The token has dropped 68% in seven months. The token remains under immense selling pressure and is a shadow of its former self.
As Ethereum recovers, ARB could follow suit. Initiatives led by the platform will also support the token. For example, the team recently spear the Gaming Catalyst Program (GCP) to accelerate the construction and deployment of GameFi platforms across its ecosystem.
Voting is ongoing and closes on August 1, when three candidates will be elected to form the GCP Council. The council will be a decentralized autonomous organization (DAO) that oversees the functions of the GCP.
Main image from Shutterstock, chart from TradingView