Arbitrum One, the mainnet of the Arbitrum protocol, has recently surpassed 200 million transactions. This impressive performance has led experts to attribute the protocol’s success to its highly efficient network. So what can we expect from the upcoming token airdrop, and how will it impact the market?
Initial Hype and Decline
Arbitrum initially generated significant interest due to its much-anticipated token airdrop, which caused the protocol to surpass Ethereum in terms of daily active addresses. However, as time went on, the buzz surrounding the network began to wane, resulting in a decline in network activity and transaction volume. Many viewed the period when Arbitrum overtook Ethereum as a one-off event.
Renewed Activity on the Network
Despite this decline, Arbitrum has once again overtaken Ethereum in terms of daily activity. This development suggests that the heightened level of activity on the network might be a recurring trend rather than a one-time occurrence. According to Artemis, the extensive adoption of the Arbitrum protocol has resulted in a significant increase in total value locked (TVL) in its smart contracts. With a current TVL of $2.2 billion, the Arbitrum protocol has outperformed most other projects, except Ethereum, in this regard.
Github Activity
However, the same cannot be said for the number of active developers on the network, which has declined significantly over the past few months. Token Terminal’s data shows a 51.4% drop in the number of code commits to Arbitrum’s GitHub in the last 90 days. If this trend persists, it may take longer for Arbitrum to introduce new features and upgrades, potentially leading to a loss of its dominant position in the market.
Negative Sentiment
Despite the protocol’s positive performance, ARB’s overall sentiment has been negative. According to Santiment’s data, there has been a sharp decline in weighted sentiment over the last few days, accompanied by a drop in the velocity of the ARB token. This decline in sentiment and trading frequency has caused the price of ARB to plummet on the charts.
In conclusion, the Arbitrum protocol has once again demonstrated its ability to outperform Ethereum in terms of daily activity. However, the decline in the number of active developers on the network and negative sentiment towards ARB highlight potential risks for the protocol’s long–term success. As the market eagerly awaits the token airdrop, only time will tell whether the Arbitrum protocol can maintain its dominant position in the ever-changing crypto landscape.
