Arbitrum Bets Big on Decentralization With a Long Awaited Airdrop

Arbitrum Bets Big on Decentralization With a Long Awaited Airdrop
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Ethereum layer-2 solution, Arbitrum, has finally started its decentralization process with the launch of its native ARB governance token. The token will be airdropped to community members on Thursday, March 23, marking Arbitrum’s official transition into a decentralized autonomous organization (DAO).

Arbitrum, a layer-2 solution designed to enhance Ethereum’s smart contracts, has continued to garner astronomical attention among the most popular blockchains. Earlier this year, the platform outpaced Ethereum in daily transactions with the number of transactions jumping from 159,919 on January 1 to over 1,103,398 on February 21. In addition, the number of unique addresses on Arbitrum’s network had reached an all-time high of nearly 2.95 million addresses in just over two months.

Since the beginning of 2023, Arbitrum has witnessed a tremedous growth in revenue with its daily trading volume pumping a staggering 369% since the first day of February, hitting a massive $18 million. Over the past few months, the scaling solution has also inked several partnerships to increase its presence in the burgeoning Web3 space.

Recently, Arbitrum’s new chain, Arbitrum Nova, which was designed for social applications and gaming, annouced an integration with Covalent, a Web3 data provider, to scale the GameFi ecosystem and accelerate the development of Web3 social applications.

Arbitrum Embarks on Decentralization

In the latest development, Arbitrum has revealed the launch of its native ARB token, joining other layer-2 projects like Optimism. On March 16, the Arbitrum Foundation said the move will convert the platform into a DAO that will allow its token holders to vote and propose any changes they would like to execute on the Arbitrum network.

Offchain Labs, the creator of Arbitrum, has further emphasized that the ARB token will make the Arbitrum ecosystem more decentralized than alternative scaling chains. Meanwhile,the Arbitrum Foundation explained,

“Arbitrum DAO will have the power to control key decisions at the core protocol level, from how the chain’s technology is upgraded to how the revenue from the chain can be used to support the ecosystem.”

Offchain Labs partnered with crypto data platform Nansen to determine token eligibility for the airdrop. According to the official document, eligibility for the airdrop was determined by a number of factors, such as bridging to Arbitrum One or Arbitrum Nova, transacting on the network over the span of several months, interacting with multiple smart contracts, conducting transactions over of $10,000 in value, and providing over $10,000 in liquidity to various protocols.

The completion of any one of these steps guarantees users a portion of the ARB airdrop, with the size of the allocation increasing based on the number of fulfilled criteria. Offchain Labs’ co-founder and CEO Steven Goldfeder noted,

“We worked very closely with Nansen and meticulously, over many, many months to decide the criteria for the user airdrop.”

The Launch of ARB Tokens

Although users can already check on the official website –, whether they qualified, the airdrop will only be claimable on March 23. Arbitrum indicated that 11.62% of the total token supply would be used for the airdrop. The Arbitrum DAO treasury will receive 42.78% of the supply, the team and its advisors 26.94%, investors 17.53%, and DAOs in the Arbitrum ecosystem 1.13%.

In a nutshell, ARB’s total circulation will number 10 billion. Out of which, the Arbitrum community will control 56% of those tokens while the other 44% of ARB’s circulation will go to the investors and employees of Offchain Labs. The Arbitrum Foundation specified that unlike Ethereum (ETH), which is used to pay out fees on Ethereum and Arbitrum, the ARB token will only be used for protocol governance.

As per Goldfeder, the DAO will also control the Arbitrum Foundation, which will receive fees generated by transactions on Arbitrum in addition to over half the ARB supply. Arbitrum’s transaction fees will continue to be paid in ETH post-airdrop.

On the other hand, Offchain Labs founder, Ed Felten has stated that the tokens reserved for insiders will be subject to lock-up periods and vesting schedules, though the proportion of ARB reserved for insiders will be higher in comparison to rival projects like Optimism (OP).


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