Arbitrum Airdrop: A Remarkable Case Study In Decentralization And Liquidity

Arbitrum’s airdrop is set to inject billions into the crypto ecosystem in just under 24 hours. With 625,000 eligible wallets and transactions and TVL at all-time highs, Arbitrum is poised to make a huge impact in the industry. The project is decentralizing by launching its governance token ARB to transition towards self-executing DAO governance.

By putting governance decision-making in the hands of the holders, there is no centralized point of failure, according to Delphi Digital.

3/ Decentralizing Arbitrum’s governance is crucial to ensure that transactions will always roll up to canonical Ethereum as the base layer itself upgrades over time.

Putting governance decision making in the power of the holders ensures there is no centralized point of failure. pic.twitter.com/quen84YFXH

— Delphi Digital (@Delphi_Digital) March 22, 2023

Decentralized perpetual exchanges are leveraging fast block times and cheaper computation to enable higher leverage limits for users. One example of the utility unlocked by L2 is GMX_IO. This decentralized perpetual and spot exchange has processed over $93B in volume since inception on Arbitrum and has recently hit all-time highs in TVL.

Arbitrum has embraced “gamers” of the system to align incentives and create real network effects. Airdrop farming is a metagame that can be designed by all projects to onboard larger user bases to bootstrap liquidity. With the ecosystem soaring, Arbitrum has an opportunity to onboard airdrop farmers to inject their liquidity right back into the ecosystem. As such, a dramatic expansion of opportunity for participating beyond core games exists.

Arbitrum is Optimism’s closest competitor, an L2 that settles transactions to Ethereum.

If we were to use Optimism as a benchmark for Arbitrum, we see Arbitrum leads in nearly all metrics.

6/ Arbitrum’s closest competitor is Optimism, an L2 that also settles transactions to Ethereum. $OP is currently valued at $11B FDV.

If we were to use Optimism as a benchmark for Arbitrum, we see Arbitrum leads in nearly all metrics: pic.twitter.com/ZMGbjeUXmK

— Delphi Digital (@Delphi_Digital) March 22, 2023

While many tokens use direct token incentives to bring users to their chain, Arbitrum was able to bootstrap liquidity without distributing a single token. The airdrop has been a great success, with both TVL and daily transactions hitting all-time highs for Arbitrum today.

In conclusion, Arbitrum’s airdrop has been a case study on how to decentralize effectively. By leveraging fast block times and cheaper computation, Arbitrum is unlocking a world of utility. Airdrop farming is a metagame that can be designed by all projects to onboard larger user bases to bootstrap liquidity. As the ecosystem soars, Arbitrum has the opportunity to onboard airdrop farmers to inject their liquidity right back into the ecosystem.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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