While there have been several waves of blockchains in recent years that have positioned themselves as alternatives to Ethereum (especially Solana, Polkadot, and Cardano), the Layer 2 solutions for Ethereum are currently in the foreground. In addition to Polygon and Optimism, this is primarily Arbitrum. An airdrop that has been taking place since Thursday is currently trying to transfer the scaling technology for Ethereum from the startup that started development to a Decentralized Autonomous Organization (DAO) and thus put it in the hands of the community.
Arbitrum is currently showing how complicated this is. Basically,
the solution does what the Lightning Network does for Bitcoin or Polygon for
Ethereum: Transactions should become faster and cheaper, and this, in turn, helps
developers to develop better, faster, and cheaper dApps. So far so good. After
the founders Ed Feltern, Steven Goldfeder, and Harry Kalodner had developed
Arbitrum with their company Offchain Labs in
recent years, the airdrop took place on Thursday.
ARB token crashes
And it went badly wrong. Because shortly after the first
users were able to get ARB tokens into their wallets, the price of the new
token immediately collapsed, by around 90 percent. While some users still
managed to trade ARB for 11 euros at the beginning, the price is only 1.30
euros a few hours after the start of trading. Traders on Binance, KuCoin,
Kraken, and Bithumb are only willing to pay fractions of yesterday's price
today.
That doesn't bode well for the start of the DAO. Apparently,
the interest in the ARB tokens, which give rights of co-determination in the
decentralized organization for the further development of the Layer 2 solution,
is not particularly great. After all, it can be said: With a market
capitalization of 1.7 billion euros, Arbitrum is in the top 35 of the crypto
charts.
How decentralized is Arbitrum now? A look at the
distribution key of the tokens after the airdrop shows that significant shares
in ARB continue to belong to the founders and their team as well as the early
investors - together these two shareholder groups come to almost 45 percent. That
doesn't give them a 50 percent majority - but above all, they can significantly
influence the token price through sales.
To be able to get the (heavily devalued) ARB tokens,
users had to have used Arbitrum several times in different forms. Among
other things, one must have conducted transactions with a total value of more
than $10,000 to be eligible for ARB tokens. The more intensively and often
you have used Arbitrum so far, the more tokens there were with the airdrop.
The more tokens, the more weight you have when voting on the further development of the Layer 2 solution. “Arbitrum's DAO governance is self-executing, meaning that the DAO's votes on on-chain actions directly have the power to make and execute their on-chain decisions without relying on an intermediary to execute them executes decisions,” says Arbitrum.
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