Blockchain News

Arbitrum Announces New Reward Program in a Bid to Revive the Ailing ARB

Arbitrum, the popular layer-2 rollup scaling solution for Ethereum, witnessed a decline in daily active users of over 17% in the last 24 hours. The graph failed to surpass 300k and currently stands at 244k. The trading activity on the platform remained dull as transaction fees followed a flatter trajectory over the past few days. These figures resulted in a 16.8% drop in the native token, ARB’s price, to $1.12, as per CoinMarketCap data. However, the Arbitrum community can expect positive changes soon.

Arbitrum introduced a new decentralized autonomous organization (DAO) revenue mechanism in an official Twitter announcement. Through this mechanism, token holders could benefit from accumulated surplus fees. Arbitrum will distribute 3,352 ETH, worth over $6 million, to its DAO as part of the rewards generated through fees. The protocol will also establish a revenue distribution mechanism, achieved through triggering a smart contract periodically, ensuring timely rewards distribution.

The transaction fee on the Arbitrum One network consists of two units – L1 and L2 fees. The former covers the cost of posting transactions on the Ethereum network, while the latter covers using resources on the Arbitrum network. The L2 fee for sending one ETH on Arbitrum was just $0.23, compared to $3.14 on Ethereum, according to L2 Fees.

Despite a 5% decline in the total value of assets held by Arbitrum to $5.82 billion in the last week, Arbitrum remained the king among L2s with a 66% share of total value locked (TVL).

Investors sentiment for ARB was negative, indicating that they anticipated more losses. The MVRV Ratio was negative, suggesting that most holders would face losses if they sold at current market prices. Moreover, the daily transaction volume in profit recorded steep hikes last week before tumbling.

In conclusion, while the recent decline in daily active users and ARB’s price may cause concern, Arbitrum’s new DAO revenue mechanism could usher in positive changes. The platform’s low transaction fees and substantial TVL share continue to make it a dominant player in the L2 scaling solutions space.


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