The Arbitrum Airdrop is Finally Here 

When it comes to layer-2 (L2) blockchains, there is no player with more positive momentum than Arbitrum.

It’s the largest and most valuable L2 by a country mile. It is host to a variety of innovative protocols, including the bear market darling and Arthur Hayes favorite, GMX. It just underwent its Nitro upgrade that boosted speeds by 7-10x.

And now, its much-anticipated airdrop is finally here.

On Thursday, eligible users will be able to forget about the bear market for a few hours as they are gifted a nice chunk of change.

Let’s break down everything you need to know about the airdrop, what it might be priced at, and how to play it.

The ARB Airdrop Basics

Airdrops are one of the more popular methods that crypto projects use to gain some initial traction.

The concept is that by a company teasing “free money” for early adopters, people are incentivized to use the project.

In theory, airdrops are a win-win. The project gains early adoption, while early users are rewarded with a token that has the potential to rise in value significantly. The Uniswap airdrop is a classic example of a successful airdrop. Uniswap went on to become the dominant decentralized exchange, while airdrop recipients were rewarded with a token that ultimately became quite valuable.

Now, of course, airdrops sometimes play out a bit differently than this as people tend to dump their rewards and then leave, but we digress.

People have been predicting an Arbitrum airdrop for what feels like forever. Hell, we started writing about a potential airdrop in September, 2022.

But, as weeks turned to months, seasons changed, institutions collapsed, competitors airdropped their own token, there was still no sight of ARB.

That is, until today.

Arbitrum’s ARB token is officially hitting the wallets of a lucky few (check your eligibility here) on Thursday.

The specifics of the airdrop are as follows:

• The total circulation of ARB will be 10 billion.

• 56% of these tokens will go to the community treasury and 44% will go to the Arbitrum team.

  • 11.5% of the treasury will be airdropped, while 1.1% will go to Arbitrum-based DAOs.

• ARB is a pure governance token. ETH will remain the gas token for Arbitrum.

• The airdrop is awarded based on a points system. The more of the airdrop criteria you check off, the more tokens you receive.

Now that you know the basics, let’s see if we can figure out what the initial price of ARB will be.

The Initial Price

The initial price of the token is obviously a big deal, as that will determine how much money you can make.

Unfortunately, there is no crystal ball we can peer into to know exactly how much ARB will be worth. However, we can estimate it using two different methods.

1. The first is to compare it with fellow L2 Optimism’s OP token. We don’t want to bore you with the math (you can read more about it here), but if you price ARB this way, you’ll end up with something between $0.60 and $2.00.

2. The other way is to use the ARB over-the-counter (OTC) market. Right now, people are pre-selling their ARB on peer-to-peer OTC markets. These markets currently have ARB valued around $1.35. Considering that people buying OTC aren’t going to be selling it for less than they bought it, we can safely assume that the $1.30-$1.35 is an initial floor price for ARB.

Both methods get us to the same general ballpark, somewhere around $1 to $2.

How Should You Play It?

Typically, the best play for airdrops is to sell right away as most everybody wants to cash in on their free money, and thus, the prices of tokens typically crash hard.

But, Arbitrum is a bit of a different case. This isn’t some random protocol. This is the fourth-largest blockchain in all of crypto, and one that many smart people believe has a bright future. It’s possible that selling the airdrop early will turn out to be a huge mistake.

In our opinion, if you plan on using Arbitrum in the future, or plan to participate in foreseeable voting efforts – it makes sense to hold at least some of it. Those who are patient and decide to ignore short-term volatility could very well benefit from Arbitrum’s growing popularity and use-cases down the road.

But if you’re not going to use protocol in the future and want to lock in profits right away – do yourself a favor and sell your position as quickly as you can.