The coin release of Arbitrum took place, as well as the long-awaited airdrop, with which the organizers wanted to reward loyal users. The action can definitely be called a success, but there were a lot of setbacks and pitfalls. Which also highlights how difficult it is to thrive in the cryptocurrency market and DeFi world without serious knowledge.
The coin release of Arbitrum, the most popular second-layer extension of the Ethereum blockchain, took place on Thursday. And also the airdrop (free coin distribution), with which the organizers of the campaign rewarded the early, loyal and persistent, above-average active users.
Arbitrum overtook Optimism
The issuance was successfully completed, the capitalization of the new coin (the ARB) – that is, the total value of the coins launched on the market at the market price – was about 1.8 billion dollars towards the end of the first day. (Of course, 1.16 billion coins are distributed, the exchange rate was typically $1.2-1.5 on the first day.) Which made it the 36th coin with the largest capitalization right from the start. In comparison, one of its main competitors, Optimism (OP), was only 66. The list included Coingecko.com according to website.
Is Arbitrum the most successful Ethereum alternative?
According to certain indicators, Arbitrum is the most popular Ethereum-compatible alternative chain, technically a second-layer (L2, layer 2) blockchain. It is intended to overcome the major shortcomings of the Ethereum blockchain, such as slowness and expensiveness. The Arbitrum gas fees, which normally cost only a few cents, a maximum of 20-30 cents, are in stark contrast to the fact that transactions on the main Ethereum can sometimes cost tens or even several hundred dollars in case of very heavy congestion. (Now we are talking about such complex transactions as more complicated smart contracts, especially in the DeFi and NFT industries.)
“Wen koin”?
Arbitrum fans have been waiting for this blockchain to have its own coin, sometimes driving the developers crazy with their questions. “Wen koin” – when will there be a coin – there were a lot of posts like this on social forums (also with incorrect English). Until now, ether was used for settlements on the blockchain, no separate cryptocurrency was connected to it.
However, the task of the new coins is not to replace ether, but to decentralize, control, i.e. governance. For the time being, no other possible use is visible. Rather, their importance lies in the fact that they start the Arbitrum blockchain on the road to decentralization. Coins can be used to vote in the DAO (decentralized autonomous organization) that will later smooth the fate of the blockchain.
Five points of the Arbitrum airdrop
The new coins are basically given to those who have already excelled in the use of the blockchain for free. For this, results had to be presented in at least three points from a list of five points. The five points consist of:
- Transactions on the blockchainidHein a long-drawn-out distributionlwith
- A transactions frequency.
- A total value of transactions.
- Edevices which hwith the help of a bridge (bridge) by Arbitrum One moved to blockchain the user.
- Aactivity on the Arbitrum Nova system.
It was evaluated as positive if someone was already active on the blockchain before the launch of the Arbitrum Nitro project, the points achieved at that time counted twice.
Peak traffic on Arbitrum
Of course, when the moment came, users flocked to the blockchain en masse. (Supposedly, 600,000 wallets received an airdrop.) Arbitrum has never seen as much interest and traffic as it did that day. It was plugged in properly, and in the normal case, a few transaction fees of 20-30 cents at the most jumped to many times, 8-10 dollars. If someone didn’t have enough ETH in their wallet, they couldn’t claim or sell their coins. Moreover, the Binance exchange just suspended the allocation of ETH on the Arbitrum blockchain, perhaps because of the high traffic and delays.
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It was an even bigger problem to manage the acquisition and claiming of the free ARB coins. dedicated website also died. It was not available for hours, or was only available with great luck. Other operations initiated on the Arbitrum blockchain, such as some swaps, were also very difficult to carry through.
Blockchain gurus preferred
As it turned out, the programmers and professional speculators were able to prepare for these problems, and bypassing the official website, they were able to communicate directly with the blockchain. (Probablyughmostly here.) As a small investor, it was a great lesson for me that you have to prepare well in advance for such events, and that it is often not recommended to go with the crowd. Those who did not use the official website, but instead requested their coins using some trick directly through the smart contract placed on the blockchain, were able to get them much easier and, above all, faster.
By the way, it was also possible to avoid the procedure, which consisted in the fact that the right to vote for the coins requested on the official website had to be immediately assigned to someone (delegate). To anyone participating in polls involving the blockchain.
ARB prices falling with tragic suddenness
Of course, most of those who receive such free coins want to sell them immediately. The price development was also an interesting lesson, which was similar to the price development of many other airdrops. The coin is somewhere over eight dollars started, and then quickly dropped to around $1.2-1.5. But at the beginning they could be fast, lucky and skillful, who could sell their booty for two or three times that amount.
This price of $1.3-$1.5 is still at the upper end of the range of preliminary estimates. The calculations were made primarily on the basis of what has been experienced since the release of the OP coin of the Optimism blockchain. By the way, the Optimism coin is currently trading with a capitalization of around 700 million dollars. So the pricing of Arbitrum’s ARB token looks pretty good for now.
You can request your Arbitrum until September
Of course, the question is what will happen in a few weeks or a few months. All the more so because new ARB coins can continue to arrive on the market. Those who are entitled to the free coin allowance can request their issuance until September, so the pressure on sellers may remain high for a while longer. Others also get a lot (for example, the “team”), and not all coins remain tied up in the long term.
The question is how much this ARB token is really worth, which is very difficult to answer. The case of Arbitrum itself clearly shows that such second-layer blockchains work great even without their own coin. In many cases, it has already been proven that a token that only gives the right to vote (governance token) does not represent much value for the majority of investors in the long term.
Especially if a smaller group already holds the majority of the voting rights. Then the purchase of the remaining coins will not really make sense, so they may practically lose their value.
Airdrop hunting is fun
One thing is for sure, hunting for airdrop deals is basically not a bad business, especially if one is already active in the DeFi business. In this case, even a relatively small fortune of a few thousand dollars tied up on the Arbitrum blockchain could be doubled if someone appeared early on this blockchain and performed relatively many operations.
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But how does a small investor know what to do and how to do it? The average small investor is also in big trouble about who to ask for advice and who to listen to. You are in an even more difficult situation if your English skills are not on solid footing either. The other problem is that there were also a series of “fake Arbitrum airdrops”, fraudulent companies, phishing links and misleading descriptions and pages.
Which one will be next?
However, let’s not forget that airdop hunting and the activity preceding it on layer 2 blockchains are (also) harmless. Coins are transferred to second-layer networks by java bridging, and these bridges were the number one target of last year’s major hacker attacks. (For example, Ronin, Wormhole, Nomad, etc.) And then we didn’t even talk about exchange rate risks.
However, professional airdrop hunters are already preparing for the next greasy bite. For example, zkSync (ZKS), Starknet (STRK) and ScrollZKP (SCROLL) airdrops are expected only among the “layer 2” blockchains.
Our related articles:
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