- Amidst the L2 competition, Arbitrum regained momentum with surging on-chain activity.
- ARB’s price rose but network metrics fell.
In a period when Optimism [OP] and Base have been hogging the Layer 2 (L2) spotlight, Arbitrum[ARB] staged a remarkable comeback in terms of activity and interest.
Realistic or not, here’s ARB’s market cap in BTC terms
Rising activity on Arbitrum
Arbitrum experienced a substantial surge in on-chain activity over the past week. This resurgence can be attributed to the launch of Arbitrum’s Odyssey, an 8-week initiative aimed at boosting user engagement within the network.
As an incentive, users stand to gain NFT rewards and increase their chances of receiving an Arbitrum airdrop.
$ARB has seen a significant increase in on-chain activity in the past week.
The current catalyst behind this surge could be Arbitrum’s Odyssey, which has the potential to reignite liquidity growth.
— Emperor Osmo🧪 (@Flowslikeosmo) September 23, 2023
Along with this, Arbitrum also made efforts to improve its ecosystem in terms of the NFT sector.
Recently, the Rari Foundation submitted a proposal to integrate Arbitrum One with the open-source Rarible Protocol. This integration would empower developers to freely and easily use the Rarible Protocol’s indexer, order book, and SDK, which are pivotal components for NFT-based applications. Such integration is expected to attract more users to the Arbitrum ecosystem.
While these developments hold the potential to elevate activity levels in the short term, it remains to be seen whether this surge will be sustained over time.
How is ARB holding up?
The price of the ARB token has recently increased from $0.788 to $0.823. However, this price uptick didn’t necessarily correlate with network growth and velocity. Both of these crucial metrics witnessed declines over the past weel.
Network growth refers to the expansion of the user base and overall adoption of the ARB token. A decline in network growth suggests that the token may not be attracting new users at the desired rate.
Velocity, on the other hand, measures how quickly tokens change hands within the network. A decrease in velocity might signify that users are holding their tokens rather than actively using them for transactions.
Despite these concerns, ARB’s price stability may be bolstered by significant whale interest. Recent data from lookonchain showed that a whale received a substantial amount of ARB tokens, totaling 1.19 million ARB (equivalent to $1 million) from FalconX.
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This particular whale has amassed a total of 2.28 million ARB (approximately $1.93 million) from Binance via #FalconX since 13 September, with an average purchase cost of $0.81 per token.
— Lookonchain (@lookonchain) September 23, 2023
While whale activity can significantly impact ARB’s price, it also introduces a degree of volatility and unpredictability to the market. The actions of these large holders can sway the token’s value both positively and negatively.