The Arbitrum token airdrop did lead to quite a huge dump of ARB projects and tokens in the ecosystems of this blockchain in a ‘sell-the-news’ type of event. However, the Layer-2 Ethereum activity remains pretty strong, with the pressure of selling ARB tokens already done with- which would make the rollup quite well-positioned for growth in the future.
The airdrop of this protocol was announced on the 16th of March, which went on to cause a major uptrend in the native token prices of multiple ecosystem projects of Arbitrum like Magic, GMX, Gains Network, and Radiant Network. One of the major reasons behind the pump was the ARB drop that would catalyze the growth of this ecosystem. However, according to a report published by An Ape’s Prologue- the thesis was front-run, as the surge in price mainly occurred between the airdrop announcement period, and the actual airdrop which took place on the 23rd of March.
Arbitrum’s Airdrop Lead To A Massive Sell-Off
The report from Arbitrum stated that on the day of the airdrop- which went on to mark the launch of the token- the ecosystem tokens prices took a major hit- which went on to suggest a classic sell-the-news event. Also, the airdrop of the cryptocurrency included an allocation of 1.1% out of the total supply of ARB of 12.75 billion for the DAOs which were a part of the ecosystem. This was a major reason behind the bullish thesis around this ecosystem- since the DAos will be getting a chance to promote the usage through incentives.
On the other hand, the size of Arbitrum’s ecosystem projects is quite less with regard to the airdrop. It has been understood that only the two leading projects, MAGIC and GMX, received values that were on the northern end of $10 million. Most of the projects did receive less than $500,000 in ARB tokens- which was quite inadequate to start incentivizing liquidity among a far greater user base.