Stormrake - Insights #Airdrop

Arbitrum: Airdrop Confirmed

Wed, 22 Mar 2023 20:46:03 +1100

The Arbitrum Airdrop has finally been confirmed and with it a whole flurry of expectations and speculation as to what will happen next. We here at Stormrake have been anticipating this for some time now and had informed our clients as early as mid October 2022 to prepare for this incredible opportunity. Read on to get prepared for one of the biggest airdrops of 2023.

The information contained here is for general information only. It should not be taken as constituting financial advice. Stormrake is not a financial adviser. You should consider seeking independent financial advice prior to making any personal investments.

Arbitrum Airdrop Overview

The token will launch and be claimable on Thursday, March 23. So if you see scam ARB tokens already trading, you should obviously avoid them. The snapshot for the airdrop was taken on February 6th of this year. If you are curious about how the eligibility criteria for the airdrop was designed, the below snapshots from Nansen will help. While obviously you can’t attempt to get the airdrop now if you were not eligible, you can take note of these criteria for any other upcoming major airdrops.

There were 625k wallets that ended up getting the airdrop, the distribution of which you can see below. If you had a wallet that received 10,250 ARB tokens, congratulations on being a supreme airdrop farmer! It is interesting to note that most of the distribution is heavily weighted towards small amounts per wallet. You can check out a pretty good dune dashboard on the airdrop here.

Tokenomics

In terms of tokenomics, the total supply of ARB is 10bn tokens, with 1.275bn being airdropped. The insider allocations for the token are higher than the UNI and OP airdrops, with the treasury, the team and Arbitrum investors owning 87% of the token. In terms of initial airdrop distribution, ARB is on the higher end vs other major airdrops like OP and 1INCH and in terms of emissions, the ARB supply schedule looks pretty good, especially for the first year.

Having looked at the distribution and qualification metrics, we can tell that a lot of thought and effort has gone into this airdrop to ensure it's rewarding the most genuine users of the Arbitrum ecosystem. The ARB token itself will be supported by most major exchanges on the day of the airdrop and will enter price discovery almost immediately.

Airdrop Expectations

Please read our previous article on Arbitrum HERE to understand learn about our airdrop expectations and how the initial price discovery period can potentially play out.

Stormrake Supports Arbitrum

We're pleased to announce that we will be supporting Arbitrum from day one with full brokerage services. So if you have managed to qualify for the airdrop and wish to sell or swap your ARB tokens or wish to put in a purchase order with your Stormrake broker, please do not hesitate to reach out. We will also support wholesale OTC trades prior to the airdrop launch.

Create a brokerage account today

Get Started

If you enjoyed this Thunder Trading, feel free to open an account and gain access to more proprietary research and work with your very own dedicated crypto broker.

No Advice Warning

The information in this newsletter is general only. It should not be taken as constituting professional advice from the author - Stormrake PTY LTD.

Stormrake is not a financial adviser and does not provide financial product advice. You should consider seeking independent legal, financial, taxation or other advice to check how the information relates to your unique circumstances. Stormrake is not liable for any loss caused, whether due to negligence or otherwise arising from the use of, or reliance on, the information provided directly or indirectly, by this newsletter.

Disclaimer

All statements made in this newsletter are made in good faith and we believe they are accurate and reliable. Stormrake does not give any warranty as to the accuracy, reliability or completeness of information that is contained here, except insofar as any liability under statute cannot be excluded. Stormrake, its directors, employees and their representatives do not accept any liability for any error or omission in this newsletter or for any resulting loss or damage suffered by the recipient or any other person. Unless otherwise specified, copyright of information provided in this newsletter is owned by Stormrake. You may not alter or modify this information in any way, including the removal of this copyright notice.

Copyright © 2022 Stormrake Pty Ltd, All rights reserved

Arbitrum: Airdrop Inbound

Mon, 17 Oct 2022 00:19:19 +1100

Arbitrum is lighting up the crypto trading community with activity as speculation around an airdrop gains momentum. In today's Thunder Trading update, we will jump into the vibrant Arbitrum ecosystem and learn about the hype.

Arbitrum: A Brief History

On Aug. 31, 2021, Offchain Labs, the company behind Arbitrum, announced the official launch of the highly anticipated Arbitrum One mainnet. A number of the top decentralized finance (DeFi) protocols, such as Aave, Balancer, Band Protocol, Curve, Sushiswap and Uniswap are already leveraging or looking to use Arbitrum to increase throughput and lower fees for their users. NFT juggernaut marketplaces such as OpenSea have naturally opened up to Arbitrum, also aiming to provide lower fees to its users.

Since its mainnet launch, the Ethereum scaling solution has been a raging success. Although competing with established ecosystems such as Polygon and up and comers such as Optimism, it's still managed to secure $973M USD of Total Value Locked (TVL) into its ecosystem. It officially has more value locked than Solana and Optimism, some of this though can be attributed to airdrop hype.

Worth noting, that at the peak of the crypto market it had secured as much as $2.66 Billion USD, showing that even at current levels, there is plenty of room for growth.

Understanding Arbitrum

To really drive home how impressive the Arbitrum ecosystem is and how far it has come in a short time, simply peruse the Arbitrum Portal and discover hundreds of decentralised apps (dApps) built on the network.

To understand why Arbitrum and other L2s exist, simply think back to DeFi summer of 2020 where a singular transaction could cost north of $200. The cost of transacting on Ethereum became almost untenable for active users and it went against the ETH ethos of 'banking the unbanked'. The L2s were spun up as a viable scaling solution allowing users to gain all the benefit of the Ethereum security budget, without having to compromise on speed and cost efficiency.

Some of the recent growth in Arbitrum is due to 'airdrop farming'. What airdrop farming boils down to is speculation. When a protocol, dApp or L2 does not yet have a token, traders speculate on if and when this will happen. Timing is one thing but how do users actually "farm"?

In the case of Arbitrum, users farm by bridging their Ethereum over to Arbitrum and participating in the ARBI ecosystem. Participation can be minting NFTs, swapping tokens on DEXs, placing trades on perpetual protocols, providing liquidity to a DeFi pool and countless other on-chain activities. All this activity grows the network, attracts more TVL, increases token speculation and maximises network effects.

Airdrop expectations

For the intrepid crypto investor engaging in on-chain activity known as airdrop farming, the lure of 'free money' and a home run trade deep in a bear market is certainly attractive.
To develop a realistic set of expectations for what can happen with a potential Arbitrum airdrop, we only need to look back at the recent airdrop of its competitor, Optimism (OP).

Looking at the listing it had on Binance OP showed the usual listing pump, as FOMO bids were fired into the newly created order book. Unfortunately, for those who came late, the airdrop farmers also come to harvest their rewards, which promptly created a near 80% sell-off.
This shouldn't be the cause of any dismay for those who are simply wanting to get the token from their broker or exchange, if you're patient you can catch some cheap tokens, as we saw with OP which pumped over 400% from its lows during the bull run. Now that Arbitrum is gaining both market and mind share, OP has been in a slow descending price channel.

For those wishing to build long term positions in L2 tokens, its important to understand that the space is very competitive and just as Arbitrum has usurped the throne from OP, it too can be made redundant with the arrival of a new better L2 solution.

GMX: Arbitrum Kingmaker

For those understandably enamoured by Arbitrum and what the network has built in such a short period of time, it's important to note one of the main risks within the Arbitrum ecosystem is GMX.

Now there is nothing critically wrong with GMX, it's simply a decentralised derivatives exchange allowing traders to access leverage without requiring KYC. The issue is actually the success of GMX, it's the largest protocol in the Arbitrum ecosystem and accounts for 40% of TVL, approx. $394M USD.

Where this can become problematic is when a similar protocol gets built on top of another chain or different L2. If it becomes popular enough this can cause Arbitrum's TVL to reduce over time and have it fade into obscurity. Inversely, if a competitor to GMX pops up on Arbitrum, this could be a boon for the burgeoning L2 and could be the trigger to making it a super sticky ecosystem.

No Advice Warning

The information in this newsletter is general only. It should not be taken as constituting professional advice from the author - Stormrake PTY LTD.