Arbitrum, the leading player in Ethereum’s layer 2 scaling landscape, has finally launched its long-awaited governance token, ARB. According to the Arbitrum Foundation, the token will mark the network's transition to a decentralized autonomous organization (DAO), enabling ARB holders to vote on key decisions governing the network.
The Arbitrum DAO will control core protocol-level decisions, including upgrades to the technology and the use of revenue to support the ecosystem. Offchain Labs, the creator of Arbitrum, believes the ARB token will make the Arbitrum ecosystem more decentralized than alternative scaling chains.
Arbitrum worked with Nansen, a crypto analytics firm, to determine who should be eligible for ARB tokens by “snapshotting” user activity in February. The airdrop of the tokens will take place on March 23 and will be granted to eligible Arbitrum users.
Arbitrum has $3.69 billion locked into its Ethereum rollup network, Aribtrum One, making it the clear market leader in a cut-throat field of competing chains, according to L2 Beat. It holds 55% of the Ethereum Layer 2 market share.
Unlike ether (ETH), which is used to pay out fees on Ethereum (and Arbitrum), the ARB token will only be used for protocol governance. ARB’s total circulation will number 10 billion, with 56% controlled by the Arbitrum community, and the remaining 44% going to investors and employees of Offchain Labs.
The introduction of ARB has been timed to coincide with the launch of Arbitrum Obit, which will enable third-party apps and protocols to build new “layer 3” blockchains based atop Arbitrum’s low-fee infrastructure.
While anticipation for an Arbitrum token has been at a fever pitch since the network went live in 2021, Arbitrum's main competitor in the Ethereum scaling space, Optimism, launched its OP token nearly a year ago when it made its transition to DAO governance. However, according to Steven Goldfeder, CEO of Offchain Labs, the tech came first, and the right time for the governance token is now, after reaching certain technical milestones.
Users are encouraged to use caution while claiming their tokens as scammers frequently use the occasion of airdrops to phish people via spoof websites and other schemes.
All in all, it seems like a joyous time for both Arbitrum users and the ecosystem alike.