Arbitrum airdrop-related selling subsides, but Dapp use sustains while smart money accumulates ARB
The Arbitrum token airdrop led to a massive dump of ARB tokens and projects in the Arbitrum ecosystem in a “sell-the-news” type of event. However, the Ethereum Layer-2 activity remains strong, with the selling pressure of ARB tokens likely done with, making the rollup well-positioned for further growth.
The Arbitrum (ARB) airdrop was announced on March 16, which caused a significant uptrend in native token prices of Arbitrum ecosystem projects like GMX), Magic , Gains Network (GNS) and Radiant Network (RDNT).
The primary reason behind the pump was the ARB airdrop catalyzing the Arbitrum ecosystem’s growth. However, according to a report from An Ape’s Prologue, “this thesis was seemingly front-run,” as the price surge mainly occurred between the period of the airdrop announcement and the actual airdrop on March 23.
The report added, “On the day the airdrop happened which marked the launch of the $ARB token, the prices of ecosystem tokens began to decline, suggesting a classic “sell the news” event.”
Moreover, the Arbitrum airdrop included a 1.1% allocation out of the total ARB's supply of 12.75 billion for the DAOs in the ecosystem. This was also a reason behind the bullish thesis around the Arbitrum ecosystem, as the DAOs will get a chance to promote usage through ARB incentives.
However, the size of the airdrop for Arbitrum ecosystem projects is significantly less. Only two leading projects, GMX and MAGIC, received values north of $10 million. Most projects received less than $500,000 in ARB tokens, which is inadequate to incentivize liquidity among a large user base.
The Ape's Prologue report added, "Optimism's incentives were significantly larger than Arbitrum's. While $OP's governance fund accounts for 5.4% of the total
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