While Arbitrum’s ARB governance token has been in a steady downturn since the airdrop at the end of March, its ecosystem is showing healthy growth.
A report Nansen’s recent report shows that Arbitrum’s activity improved after the airdrop, stabilizing “at a higher level” than before the airdrop. Daily active users, gas fees, and transaction count have all held higher levels on the Ethereum summary since April 2023.
The gap between the number of active users on Arbitrum and Optimism widened after the Aribtrum airdrop, moving closer to Ethereum.
Trading volume on Arbitrum-based decentralized exchanges paints a similar picture, showing an apparent increase in volume after the airdrop.
Furthermore, Nansen’s report showed that ARB airdrop recipients alone only accounted for around 5% of the activity on the blockchain and showed that Arbitrum has attracted many more new users to Arbitrum after the airdrop.
Potential catalysts for ARB rally
Additionally, an upcoming Ethereum upgrade in the second half of 2023, dubbed Cancun-Deneb (Dencun), will include EIP-4844 (Proto-Danksharding), which will lower transaction fees on Arbitrum, increasing the value proposition of blockchain.
Additionally, the Arbitrum Foundation recently disclosed aggregated data from its sequencer, a portion of the L2 fees paid by users for publishing the data on Ethereum.
The Foundation has decided to pass on the profits from Sequencer, totaling 3,352 ETH or $5.4 million, to the Arbitrum DAO, which will be managed by the ARB holders.
A DAO revenue stream can potentially create returns for ARB holders if the community votes to lead bounty holders. It remains to be seen how the funds are managed by the foundation and the DAO.
“Smart money” has ARB
Nansen’s data shows that the “smart money” and funds that ARB accumulated after the airdrop have yet to be sold, which is encouraging. The on-chain analytics firm labels the Ethereum addresses of high-volume, profitable traders as “smart money.”
The funding rate for ARB perpetual swap contracts turned negative like the rest of the crypto market after the SEC filed lawsuits against the largest exchanges in the industry, Binance and Coinbase, according to Coinglass data.
Financing fees are paid by dealers for short or long-term perpetual swaps of an asset depending on its demand. If the demand for short orders is higher, it is considered more expensive, so traders on the short side pay for the long ones.
Currently, funding rates are close to zero, suggesting that futures traders are ARB neutral.
The ARB/USD pair has observed a downward trend since the token’s launch in March. The compression of the channel shows the possibility of a falling wedge pattern, which has a tendency to break out.
However, if ARB breaks below support from the support line of the wedge pattern around $0.90, the move to the downside can quickly amplify.

On the ETH scale, ARB broke below the May low of 0.00057 ETH after SEC lawsuits. The token last traded at 0.00056 ETH.
Technically, ARB shows the possibility of a negative trend reversal. However, Dencun’s upcoming update on Ethereum and decisions made by the Arbitrum foundation in directing Layer 2 rollup revenue will eventually dictate ARB’s price action.
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