Arbitrum [ARB] AirDrop grabs attention: Decoding the token's reaction

Arbitrum released over 12% of its ARB supply through an AirDrop. 

Arbiturm continued to outperform its competitors, but ARB fell victim to a scam.

Arbitrum [ARB] completed its latest AirDrop on 23 March, increasing the network’s newly launched token’s circulating supply. As per Delphi Digital's Twitter thread, Arbitrum AirDropped over 12% of its supply, which accounted for 1.275 billion ARB tokens.

https://twitter.com/Delphi_Digital/status/1638675055558246408?s=20

Realistic or not, here's ARB market cap in BTC's terms

ARB token allocation 

As the tokens were AirDropped, they were then allocated to others in different ratios. The majority share, which accounted for 43%, was allocated to the DAO Treasury, which was followed by 27% allocated to the team and advisors. ARBs were also sent to Arbitrum DAOs, individual wallets, and investors.

https://twitter.com/Delphi_Digital/status/1638675056929964033?s=20

Arbitrum outperforming its competitors? 

Delphi Digital’s tweet also mentioned the state of Arbitrum compared to its competitors, such as GMX and Optimism [OP]. GMX has processed over $93 billion in volume since its inception on Arbitrum and has recently hit all-time highs in TVL.

However, for GMX, the TVL growth came to a halt over the last few days as DeFiLlama’s data revealed that the graph moved sideways. While GMX’s gaining spree stopped, the opposite was true for Arbitrum, as its TVL gained upward momentum.

Source: DeFiLlama

Arbiturm also outperformed Optimism in several key metrics, that too by a large margin. 

https://twitter.com/Delphi_Digital/status/1638675062411722755?s=20

How much are 1,10,100 ARBs worth today?

The current state of ARB

As ARB tokens entered circulation, their value dropped by an astounding 88%. The hype around ARB and its massive price decline might have played a role in making the token trend on CoinMarketCap. At press time, ARB was valued at $1.47 with a market capitalization of over $1.8 billion, making it the 34th largest token.

However, despite the drop in price, investors’ and whales' interest in ARB remained unaffected. Lookonchain’s data revealed the list of the top five buyers of ARB. A whale bought 4.94 million ARB with 3,700 ETH, which is worth over $6.7 million. 

https://twitter.com/lookonchain/status/1639111212096167937?s=20

ARB's market maker, Wintermute Trading, also received 40 million tokens and transferred a small amount of ARB to exchanges for testing. Investors' interest was also proven by checking Santiment’s chart, which showed a massive hike in the token’s volume.

However, positive sentiments around ARB declined heavily, which could cause trouble in the coming days.

Source: Santiment

Investors should be cautious

As the hype around ARB continued to grow, fraud regarding the token has already begun. A scammer created fake tokens of the same name as ARB and generated $24,480 in volume on Uniswap [UNI]. Initial reports revealed that the fake ETH/ARB had over 95 million fake ARB and over 400 WETH on Uniswap V3. Therefore, caution is advised. 

https://twitter.com/lookonchain/status/1638853715083018241?s=20

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