While the Arbitrum governance token ARB has been in constant decline since the year landing at the end of Marchits ecosystem shows healthy growth.

The recent Nansen report shows that Arbitrum activity improved after the airdrop and stabilized “at a level higher” than before the airdrop. Daily active users, gas fees and number of transactions have maintained consistently higher levels since April 2023.

The gap between the number of active users on Arbitrum and Optimism widened after the Aribtrum airdrop and closed on Ethereum.

Trading volume on decentralized arbitrage-based exchanges paints a similar picture, showing an evident increase in volume after the airdrop.

In addition, Nansen’s report shows that the recipients of the ARB airdrop represented only about 5% of the activity on the blockchain, and that Arbitrum attracted significantly more new users after the airdrop.

Potential catalysts for the rise of ARBs

In addition, the upcoming update of Ethereum in the second half of 2023, called as Cancun-Deneb (Dencun), will include EIP-4844 (proto-Danksharding), which will reduce transaction fees on Arbitrum, thereby increasing the value of the blockchain.

In addition, the Arbitrum Foundation recently disclosed the accumulated data from its sequencer, which is part of the second layer fees paid by users to send data to Ethereum.

The foundation decided to hand over the sequencer’s earnings totaling 3,352 Ether (ETH), or $5.4 million, on Arbitrum DAO and ETH will be managed by ARB holders.

Total:

Arbitrum DAO has accumulated approximately 3,352 ETH in revenue,
~5,954 ETH will be returned to the sequencer, which is the price for sending all the data to the Ethereum network.

How exciting is that?

— Arbitrum (,) (@arbitrum) May 10, 2023

A source of revenue for the DAO – a decentralized autonomous organization – can potentially generate revenue for ARB holders if the community votes to direct rewards to holders. It remains to be seen how he will manage the funds of the foundation and the DAO.

The “smart money” is held by ARB

Nansen’s data shows that the “smart money” and funds that ARB accumulated after the airdrop still haven’t sold, which is encouraging. An on-chain analytics firm refers to the Ethereum addresses of high volume and profitable traders as “smart money”.

Funding rates for ARB perpetual swaps turned negative after the Securities and Exchange Commission (SEC) like the rest of the crypto market. filed lawsuits against the largest exchanges in the industryBinance and Coinbase according to CoinGlass data.

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Funding rates are paid by perpetual swap traders for shorting or longing an asset depending on its demand. If demand for short orders is higher, it is considered more expensive, so traders on the short side pay longs.

Currently, funding rates are close to zero, indicating that futures traders are neutral towards ARB.

The ARB/USD pair has seen a downward trend since the token’s launch in March. Channel compression shows the possibility of a descending wedge pattern that tends to break upwards.

However, if ARB breaks below the support line of the wedge pattern around $0.90, the downward movement could intensify quickly.

On the ETH scale, ARB broke below the May low of 0.00057 ETH following the SEC lawsuits. At the time of publication, the token was trading at 0.00056 ETH.

Technically, ARB shows the possibility of a negative trend reversal. However, the upcoming update from Dencun on Ethereum and the decisions made by the Arbitrum Foundation in directing L2 rollup revenue will ultimately dictate ARB price action.