The Arbitrum Foundation recently announced its official transformation into a decentralized autonomous organization, which would be marked with an airdrop of ARB tokens to eligible community members on March 23. However, the ARB airdrop page crashed due to overwhelming requests, resulting in poor claiming experiences for some users.
What is an Airdrop?
An airdrop is a marketing strategy used by blockchain projects to distribute tokens or coins to users who complete specific tasks or meet specific criteria. This approach aims to create a buzz around the project, increase its community engagement, and attract potential investors.
Arbitrum Airdrop Technical Issues and OTC Trading
Arbitrum’s official airdrop page crashed due to the overwhelming number of requests from users, which led to poor claiming experiences for some eligible community members. Prior to this, a significant number of users have already started selling their unreleased ARB in over-the-counter (OTC) markets.
OTC trading is a type of cryptocurrency trading that allows buyers and sellers to directly trade without the intervention of a centralized exchange. In this case, sellers receive payment from buyers and then they give up the seed phrase linked to the eligible wallet.
In an interview with Cointelegraph, some OTC traders believed that the value of the tokens when launched could be as high as $1, so they did not mind selling at $0.5 per token. The estimates by then paved the way for a possible profit of $0.5 for the buyers, but it would be much higher than expected when it finally took off.
Arbitrum Token Sell-Off
The listing of ARB tokens on exchanges was immediately followed by a swift and significant sell-off, with prices plummeting from a high of $10.29 to lows of $1 within just two hours. Trading began at $7.50 on ByBit, but soon dropped to $1.50 in just a few minutes. Only a lone address was lucky enough to pull off a trade while the tokens were peaking at $10.29 via the ARB/USDC pool on Uniswap. The address reportedly netted $64,340 for 6,250 tokens.
Meanwhile, a Nansen data revealed that approximately $5.01 million worth of ARB tokens moved from “smart money” wallets to centralized or decentralized exchanges, presumably for the purpose of selling at the time of the massive sell-off. The term “smart money” is applied by the analytics firm to active addresses that conduct trades of significant value.
The Way Forward
Despite the initial sell-off, some traders remain bullish on ARB, and the token could follow the trajectory of previous airdrops. The claiming window for ARB tokens will be open for 184 days until September 24. The token’s price may fluctuate in the coming weeks, but some traders believe that the token’s value will rise as the platform grows and attracts more users.
Final Thoughts
The recent Arbitrum airdrop was certainly a messy affair. Although the initial sell-off caused panic among some traders, some analysts still have confidence that the token’s value may rise as the platform grows and attracts more users. It remains to be seen what the future holds for the ARB token, but its claiming window will still be open for the next six months.
