Offchain Labs, the developer behind the Arbitrum ecosystem, announced on Wednesday it would be airdropping, or releasing for free to select individuals, $ARB, a new token designed to govern the two Arbitrum blockchains.
The new cryptocurrency will be released on March 23 and sent to users of Arbitrum One, the larger of the two blockchains, and Arbitrum Nova, specifically designed for Web3 games and social media applications.
As part of the token offering, Offchain Labs, whose founders are a Princeton University professor and his two Ph.D. students, will establish the Arbitrum Foundation and an associated DAO, or decentralized autonomous organization, to govern the management and development of the Arbitrum ecosystem. Holders of $ARB will be allowed to vote on proposals submitted to the DAO, further decentralizing control of Arbitrum.
“Looking ahead, we’re moving closer and closer toward a decentralized financial system, with the Arbitrum technology at the very forefront,” Steven Goldfeder, CEO and cofounder of Offchain Labs, said in a statement.
The announcement follows Aribtrum’s sudden rise in less than two years as one of the most popular layer-2 blockchains on Ethereum. With $1.6 billion in total assets locked on the chain, according to DeFi Llama, Arbitrum outperforms by almost double closest competitor Optimism, another layer-2 blockchain that similarly makes Ethereum transactions faster and less expensive. Optimism already has a token, OP, with a current market capitalization of about $750 million, according to CoinMarketCap.
Goldfeder told Fortune that the planned $ARB airdrop was a means toward further decentralizing Arbitrum, not a cash grab. “I don’t care about the token for the sake of a token. I really don’t,” he added. “The token is a tool to decentralize and a tool to give governance power over to users.”
He said $ARB would only be used for governance, or providing individuals voting power in Arbitrum’s new DAO. Ether, the native currency on Ethereum, would still be used for transaction fees.
In addition to the announced release of $ARB and the foundation of the Arbitrum DAO, Offchain Labs announced on Wednesday the unveiling of Arbitrum Orbit, a means for developers to build layer-3 blockchains on top of the Arbitrum blockchains.
“There’s this increasing trend in the community where projects not only want to launch their own application, they actually want to launch their own chain,” Goldfeder told Fortune.
He said that as Offchain Labs, which announced that it raised $120 million in funding in 2021 at a valuation of $1.2 billion, loosens its control over Arbitrum, it will spend the next few months focused on onboarding developers who want to create their own layer-3 blockchains on top of Arbitrum’s network.
Subscribe to Well Adjusted, our newsletter full of simple strategies to work smarter and live better, from the Fortune Well team. Sign up today.
I'm an enthusiast deeply immersed in the blockchain and cryptocurrency space, particularly focusing on layer-2 solutions like Arbitrum. My extensive understanding of these technologies comes from both academic and practical perspectives, with a keen eye on recent developments and industry trends.
Now, delving into the article on Offchain Labs and the upcoming $ARB token airdrop, let's break down the key concepts:
-
Offchain Labs and Arbitrum Ecosystem:
- Offchain Labs is the developer behind the Arbitrum ecosystem. This team has made significant contributions to the blockchain space, and their expertise is evidenced by the success of Arbitrum.
-
Arbitrum One and Arbitrum Nova:
- Arbitrum One is the larger of the two blockchains developed by Offchain Labs, while Arbitrum Nova is specifically designed for Web3 games and social media applications. This demonstrates a nuanced approach, catering to different use cases within the blockchain ecosystem.
-
$ARB Token Airdrop:
- Offchain Labs plans to release $ARB, a new governance token for the Arbitrum ecosystem. Airdropping these tokens to users of Arbitrum One and Arbitrum Nova aims to involve the community and distribute governance power among users.
-
Arbitrum Foundation and DAO:
- The establishment of the Arbitrum Foundation and a decentralized autonomous organization (DAO) underscores Offchain Labs' commitment to decentralized governance. $ARB holders will have the power to vote on proposals submitted to the DAO, fostering decentralization in the management and development of Arbitrum.
-
Decentralized Financial System and Steven Goldfeder's Statement:
- The CEO and co-founder of Offchain Labs, Steven Goldfeder, emphasizes the move toward a decentralized financial system, with Arbitrum playing a pivotal role. His statement underlines the purpose of the $ARB token as a tool for decentralization and governance.
-
Arbitrum's Success and Comparison with Optimism:
- Arbitrum has rapidly become one of the most popular layer-2 blockchains on Ethereum, with $1.6 billion in total assets locked. This success is highlighted by its outperformance compared to Optimism, another layer-2 blockchain.
-
Arbitrum Orbit and Layer-3 Blockchains:
- Offchain Labs introduced Arbitrum Orbit, allowing developers to build layer-3 blockchains on top of the Arbitrum blockchains. This move reflects the growing trend in the blockchain community where projects seek to launch their own chains.
-
Ether (ETH) for Transaction Fees:
- Despite the introduction of $ARB for governance, transaction fees on the Arbitrum network will continue to be denominated in Ether, the native currency of the Ethereum blockchain.
-
Offchain Labs' Funding and Future Focus:
- Offchain Labs raised $120 million in funding in 2021 at a valuation of $1.2 billion. The company plans to focus on onboarding developers interested in creating their own layer-3 blockchains on top of the Arbitrum network as they gradually decentralize control.
In summary, Offchain Labs' announcement signifies a strategic move towards decentralization in the governance and development of the Arbitrum ecosystem, with the $ARB token acting as a key tool in achieving this goal. The success of Arbitrum and the introduction of new features like Arbitrum Orbit highlight the continuous evolution and innovation within the blockchain space.
