Arbitrum’s Governance Token ARB Pennies Away From All-Time Low, Market Cap Jumps 75% to $2.23B

Arbitrum's governance token is a few pennies from its all-time low, data from CoinGecko shows.

Layer 2 (L2) scaling solution Arbitrum’s governance token (ARB) is now just three cents away from hitting a new all-time low, according to data from CoinGecko.

Over the past year, ARB’s price has seen a 24% decrease, bringing its value down to 77 cents — just three cents from its record bottom of 74 cents. Despite this downturn, Arbitrum’s governance token has seen a substantial 75% increase in its market cap.

As of press time, one year ago, ARB’s market cap stood at roughly $1.27 billion. Today, the token’s market cap has grown to $2.23 billion.

The market cap of any cryptocurrency is determined by multiplying the total number of tokens in its circulating supply by the price of a single token. In most cases, there are a few ways in which a token’s market cap can increase.

One common method is for a token’s circulating supply to remain unchanged while its price increases. However, in light of a declining price, another way to observe an increasing market cap, as in the case of Arbitrum’s governance token, is for the token’s circulating supply to increase more than the price slump.

At the time of writing, Arbitrum’s circulating supply stands at roughly 2.9 billion tokens.

Related: Over $740 Million Worth of Tokens to Unlock in Next 30 Days

Token Unlocks for Next Three Years

The inverse relationship between ARB’s price and market cap comes as Arbitrum has seen a number of hefty token unlocks, referring to the release of tokens previously frozen to prevent large-scale dumping by investors during a project’s early days.

Arbitrum’s vesting schedule highlights how each month will see a token unlock until 2027. (Messari)

According to data from blockchain research firm Messari, Arbitrum began substantial token unlocks in March when 1.13 billion ARB tokens became unfrozen, marking the L2’s largest one in the past year.

The March release jumpstarted a roughly 108 million ARB unlock every month “for the remaining three years,” as per the network’s governance documents, unleashing about 3.6 billion more tokens on top of the current unlocked token total of 6.4 billion. At current prices, each monthly unlock excluding the one in March 2024 is valued at $83 million.

The remaining unlocks are earmarked for the Arbitrum Foundation, Offchain Labs, and investors, respectively, according to Messari.

Arbitrum’s ARB token has fallen about 64% since reaching a local high of over $2.15 in March when the first big token unlock after the airdrop occurred.

Related: Arbitrum’s $237 Million Catalyze Gaming Proposal Passes Despite Substantial Opposition

News source：https://www.kdj.com/cryptocurrencies-news/articles/arbitrum-governance-token-arb-pennies-time-low-market-cap-jumps-b.html

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