A popular cryptocurrency trader is warning investors about token airdrops for layer 2 (L2) scaling solution Arbitrum (ARB).
Pseudonymous Altcoin Trader Sherpa says His 193,000 Twitter followers that when the Arbitrum Foundation launches its native token, the price will likely plummet before rising again, pointing to the Blur (BLUR) token crash in February to support his price action theory.
“I am going to use this type of frame for the next ARB airdrop. This is going to be a lot of fun to trade and I am going to be ready for it. Waiting for it to download like hell initially and then the MMs (market makers) will buy and ship it. Low time frame traders dream.”
The Ethereum (ETH) Layer 2 Arbitrum is a cumulative scaling solution that settles transactions off-chain for lower fees. Polygon’s rival (MATIC) is planning a March 23 airdrop of its first ARB tokens, which will serve as the governance token for the Arbtirum One and Arbitrum Nova networks.
According to the project, there is an initial limit of 10 billion ARB tokens, of which 56% are owned by the community. The airdrop will deliver 11.6% of the total supply to the users of the Arbitrum platform.
About 44% of the total supply will go to investors and employees of Offchain Labs, the company behind the Arbitrum blockchain project.
With the ARB token, the project is transitioning towards a decentralized autonomous organization (DAO). Token holders will have the ability to vote on the governance decisions of Arbitrum One and Arbitrum Nova, which are Arbitrum’s networks of scaling solutions designed for faster and less expensive transitions on the Ethereum smart contract platform.
Says Arbitrum in a blog post,
“Arbitrum’s DAO governance is self-executing, which means that DAO votes on on-chain actions will directly have the power to effect and execute their on-chain decisions, without relying on an intermediary to carry out those decisions. Self-executing governance is a critical milestone for decentralization, and Arbitrum is leading the way as the first L2 to launch self-executing governance.”
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