All you need to know about Arbitrum’s token launch, airdrop, DAO transition and more

Arbitrum, like most crypto projects, is designed to be decentralised. However, since its launch in August 2021, the platform has been under the sole control of an entity known as Offchain Labs. This will change after the introduction of the platform's native ARB governance token. It will put the reigns of the protocol in the hands of its community.

Arbitrum plans to launch its native ARB governance token on March 23. The token will have a maximum circulating supply of 10 billion ARB units. As mentioned earlier, of the total supply, the platform aims to airdrop 11.62 percent to its early supporters. And a further 1.13 percent of the total supply will be airdropped to developers building apps on Arbitrum.

There are a handful of checkboxes that one must tick to be eligible for the Arbitrum airdrop. Users will receive points based on the number of checkboxes they tick. The number and value of transactions, how many months you have been active on Arbitrum, the number of smart contracts you have interacted with, etc. all play an important role in deciding a user’s eligibility points.

Users need a minimum of 3 points to be eligible to receive ARB tokens through the airdrop. Depending on their points, users can receive a minimum of 625 ARB and a maximum of 10,250 ARB.

It’s almost impossible to predict the price of ARB after its launch. However, this hasn’t stopped experts from trying. Several popular crypto traders and analysts took to Twitter to provide their predictions and the reasonings behind their estimates. Most of these predictions are based on the valuation of Optimism’s native token, OP. This is because Optimism is the closest competitor to Arbitrum, thereby offering a good reference point for price predictions.

Most analysts are using two metrics as their base for ARB’s price prediction, market cap and fully diluted valuation (FDV). Market cap is calculated by multiplying the current price of the token by its circulating supply. On the other hand, FDV is calculated by multiplying the current price of the token by its maximum supply. OP currently has a market cap of $799 million and an FDV of $10.9 billion.

Therefore, if ARB is to achieve a similar market cap as OP, its price would be around $0.62. This is calculated by dividing OP’s market cap by ARB’s circulating supply on the day of its launch, which would be 1.275 billion. If we use a similar approach using FDV, ARB would be trading at $1.09. This is calculated by dividing OP’s FDV by ARB’s total supply.

Total value locked (TVL) is another figure we can use to ascertain ARB’s price. TVL indicates the total deposits on a network’s DeFi protocols and also represents an ecosystem’s liquidity. At the time of writing, Arbitrum ranked fourth in terms of TVL amongst all blockchains, with a TVL of $1.82 billion, according to data from DeFiLlama. Its nearest competitor, Optimism, has a TVL of $971 billion.

Armed with these figures, a Messari analyst who runs the ‘Average Joe’s Crypto’ Twitter handle estimated that ARB’s price upon launch would be around $1.84. He arrived at this number by first calculating OP’s FDV-TVL ratio. This is calculated by dividing OP’s FDV by its TVL, which amounted to roughly 11.24 at the time (March 16).

Hypothetically speaking, if we assume that ARB will have a similar FDV-TVL ratio, we can estimate ARB’s FDV after launch. All we have to do is multiply OP’s FDV-TVL ratio with Arbitrum’s TVL. “Using the $OP FDV/TVL multiplier, $ARB would have an FDV of ~$18.43 billion” read the March 16 tweet from Average Joe’s Crypto. “$ARB has a total supply of 10 billion.

If we calculate ARB’s FDV with this method and use its updated TVL readings ($1.82 billion), ARB’s FDV comes to around $20.45 billion. Now, simply divide this by ARB’s total supply (10 billion tokens) and we get a possible valuation of $2.04.

The ARB airdrop goes live on March 23. However, there will plenty of bad actors looking to capitalise on over-eager community members and investors. They will dangle a carrot by offering some non-existent backdoor to the airdrop or promise tokens to those who are not eligible for the airdrop. Of course, these are just attempts to dupe unsuspecting investors.

Arbitrum has already issued a notice to its community regarding fake websites and phishing campaigns offering Arbitrum airdrop tokens. Similarly, on March 19, popular smart contract auditing firm, CertiK, highlighted an illegitimate Arbitrum Twitter account — “arbitrum_launch” — that was advertising a fake token airdrop.

On the same day, another blockchain security firm, Redefine, uncovered a fake Arbitrum website that was asking users to connect their wallets for the airdrop. Of course, any users that did link their wallet to the site would most likely be robbed of their assets. In total, the scam detection tool, Scam Sniffer, founds 273 phishing sites targeting the Arbitrum airdrop.

Arbitrum’s token launch is a much-awaited event in the cryptosphere. The excitement around the airdrop is driving the growth of other similar networks as well. For instance, ZkSync, another layer-2 scaling solution for Ethereum, has seen a 5X increase in the number of addresses bridging to the protocol. This is because ZkSync still does not have its own token. Therefore, users believe that the protocol will follow in the footsteps of Arbitrum, and if it does, they would be eligible for the ZkSync airdrop.

Moreover, based on the price predictions offered by experts, those eligible for the ARB airdrop could receive anywhere between $400 and $20,600 worth of tokens. However, crypto markets are known to be highly volatile, therefore it is impossible to predict what ARB will be worth on the day of its launch, leave alone its future valuations. Therefore, it is extremely important to do your own research and invest only as much as you can afford to lose completely.