A popular crypto trader is warning investors about the upcoming token airdrop for layer-2 (L2) scaling solution Arbitrum (ARB).
Pseudonymous trader Altcoin Sherpa tells his 193,000 Twitter followers that when the Arbitrum Foundation airdrops its native token, the price will likely plummet before rising again, pointing to the token drop of Blur (BLUR) back in February to support his price action theory.
[adinserter block="1"]“I am going to use this type of framework for the upcoming ARB airdrop. This is going to be a really fun one to trade and I am going to be ready for it. Expecting it to dump like hell initially and then the MMs (market makers) will buy it up and send it up. Low time frame traders dream.”
The Ethereum (ETH) layer-2 Arbitrum is a roll-up scaling solution that settles transactions off-chain for lower fees. The Polygon (MATIC) rival is planning a March 23rd airdrop of its first ARB tokens, which will serve as the governance token to the Arbtirum One and Arbitrum Nova networks.
According to the project, there is an initial cap of 10 billion ARB tokens, of which 56% are community owned. The airdrop will deliver 11.6% of the total supply to users of the Arbitrum platform.
About 44% of the total supply will go to investors and employees of Offchain Labs, the firm behind the Arbitrum blockchain project.
With the ARB token, the project is transitioning into a decentralized autonomous organization (DAO). Token holders will have the ability to vote on governance decisions for Arbitrum One and Arbitrum Nova, which are Arbitrum’s scaling solution networks designed for faster and less expensive transitions on the Ethereum smart contract platform.
Says Arbitrum in a blog post,
“Arbitrum’s DAO governance is self-executing, meaning that the DAO’s votes about on-chain actions will directly have the power to effect and execute its on-chain decisions, without relying on an intermediary to carry out those decisions. Self-executing governance is a critical milestone for decentralization, and Arbitrum is leading the way as the first L2 to launch self-executing governance.”
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