Arbitrum rose by 12% as Wallet Addresses surpassed 5M on Airdrop Hype
Arbitrum token (ARB/USD) is trading at $1.80, increased by 12.55% in 24 hours. The token gained value as the number of Arbitrum accounts crossed 5 million. The achievement came less than a month following a much-anticipated airdrop.
The Arbitrum ecosystem grew after airdrop hype
On April 17, Dune Analytics reported that the number of wallet addresses for the Ethereum layer-2 scaling solution Arbitrum (ARB) had topped 5 million. ARB’s ecosystem now has over 4 million active accounts in addition to individual addresses. Moreover, the network has conducted approximately 200 million transactions since the ecosystem’s start.
On top of the Ethereum network, the Arbitrum blockchain is a layer-2 scaling solution intended to reduce transaction costs and boost throughput. On March 23, the network formally transformed into a DAO with the airdrop of its ARB token.
The event witnessed the release of 1.275 billion ARB tokens to a total of 625,143 eligible recipients. After the most recent ARB airdrop, there were 3.4 million accounts. Furthermore, the hype around the airdrop triggered the recent increase in the number of wallet addresses.
The enormous surge drove Arbitrum above the 5 million account threshold. However, it appears that weekly user activity has decreased noticeably since the high of 1.38 million users on March 20 to about 333,000 users. Therefore, it is feasible that the number of accounts is more in line with Arbitrum’s pre-airdrop activity.
Moreover, Dune Analytics reports that 83.7% of all ARB accounts had at least one transaction. The fact that 24.2% of the more than five million Arbitrum accounts had only one transaction suggests that some customers may have sold their ARB as soon as they received the airdrop.
Arbitrum’s Proposal To Return 700 Million ARB Crashes
Meanwhile, on April 15, the network’s community strongly opposed the Arbitrum DAO’s plan to return 700 million governance tokens to its funds.
The Arbitrum Foundation moved funds in March without getting the community’s consent, prompting the launch of the improvement plan known as AIP-1.05. The proposal attempted to reverse Arbitrum’s Foundation’s controversial move to transfer $1 billion worth of governance tokens to itself without the DAO’s consent.
However, the majority of ARB voters did not support Arbitrum Improvement Proposal-1.05. According to sources, most ARB token holders opposed the action. 84% of the total votes cast—118 million ARB tokens—were voted against the proposal. Meanwhile, 20 million tokens, or around 14.57% of all votes, supported the proposition.
Many voters opposed the AIP-1.05 plan because they believed that, in the long run, the foundation’s capacity to distribute tokens was more crucial than a temporary rise in the price of ARB/USD.
Moreover, another important reason the plan was rejected is that it overlooked the fact that the AIP-1.1 had already resolved the financial issue. The foundation has previously intended to move the tokens to a vesting smart contract that the DAO can change. It is thought that using AIP-1.05 makes things more complicated. However, the ARB/USD continued to move higher on Tuesday despite these developments and conflicts between the Arbitrum Foundation and the community.
