Arbitrum’s (ARB-USD) active users are skyrocketing, and total transactions on Arbitrum have reached new highs this week, outpacing Solana. Despite the soaring activity, Arbitrum’s governance token is down 59% from its all-time high in January 2024. Arbitrum still holds the crypto crown as the top Ethereum (ETH-USD) layer 2 blockchain by total value of crypto assets, daily transactions, and daily active users.
As transaction fees hit their lowest level on Ethereum in years, Arbitrum reached an all-time high in activity. The daily number of active addresses on Arbitrum soared to an all-time high of 856,000, up 150% from 341,000 at the start of May. This surge pushed Arbitrum past Solana’s (SOL-USD) 833,000 daily active users despite Solana’s memecoin trading frenzy.
Ethereum Upgrade Spurs Activity
This boom coincided with Ethereum’s Dencun upgrade on March 15, which slashed transaction costs on Ethereum layer 2 blockchains by up to 99%. A week before the upgrade, Arbitrum saw 747,000 transactions, which jumped to 1.5 million a week later. Adding to the buzz, the Arbitrum DAO announced plans to invest 35 million ARB tokens in stable, liquid assets, attracting pitches from over two dozen companies, including asset management giant Franklin Templeton and Securitize, the company aiding BlackRock’s asset tokenization efforts.
Token Price Woes
The price chart of the ARB token paints a grim picture. After reaching an all-time high of $2.26 on January 11 and nearly touching it again at $2.17 on March 7, the token has since plummeted by 59%, dropping to a new seven-month low at $0.92.
One reason for ARB’s poor performance is the massive token unlock by Offchain Labs, Arbitrum’s developer team, and its investors. On March 15, around $1.2 billion worth of ARB tokens were unlocked and distributed, with these tokens being vested for a year.
Is Arbitrum a Buy?
According to TipRanks’ Summary of Technical Indicators, Arbitrum is a Sell.
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