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The long-awaited Arbitrum airdrop is finally here. Learn out more about Arbitrum, its transition to a DAO and the new ARB token in this article.

A decentralized autonomous organization (

) puts control of an entity into the hands of its community members. Unlike a top-down management approach, voting by token holders is used to steer development decisions and other important matters impacting the ecosystem. On a blockchain, DAO governance also promotes transparency because all voting records are posted and are viewable by the community. Recently, Arbitrum has been preparing for a transition to DAO governance, and the airdrop of the long-awaited ARB token will initiate this transition.

. In addition, Ethereum currently powers over 3,000 DApps, and that number grows regularly. Because Ethereum cannot handle this volume’s projected growth over the long term, scaling via the Arbitrum network is essential. 

. As such, Arbitrum is an extension of Ethereum’s Layer 1 network, and its functionality is supported via 

 built on the blockchain. In addition to maintaining the 

 network, the Arbitrum network lowers developers’ costs, prevents fraud and optimizes speed.

, another Ethereum Layer 2 solution. Both use 

, but they handle fraudulent transactions differently. When Optimism identifies a fraudulent transaction, the entire transaction is sent through the Ethereum virtual machine (

). Arbitrum, on the other hand, only sends the questionable aspect of the transaction through the EVM. This results in a much higher transaction capacity.

When the Arbitrum ecosystem moves to DAO governance, it will function within the ARB ecosystem. The Arbitrum token, ARB, will be airdropped to the Arbitrum community on Mar 23, 2023. 

Find out how to claim the Arbitrum airdrop with our 

 and trade a suite of ARB products on Bybit today! 

Arbitrum launched in 2021 and gained immediate popularity. In fact, within a few weeks after its launch, its total value locked (

) grew over 2,000%. Most of its growth since that time has been organic, as developers have increasingly been drawn to its exceptional benefits. In fact, on Feb 22, 2023, 

 the Arbitrum One network processed more transactions than Ethereum for the first time ever. The Arbitrum ecosystem is entering a new chapter in its history with the Arbitrum token airdrop, and many in the crypto community are looking forward to its continued growth. 

Arbitrum was created as an Ethereum Layer 2 solution to support Ethereum’s growth and functionality. Now, this solution is transitioning to a DAO. After the airdrop of the ARB 

, token holders will have voting power to influence important management decisions and developmental improvements going forward. By taking this important step, the Arbitrum community gains power over the future of the network and will have the ability to make changes that are in the members’ best interest.

Arbitrum uses smart contracts to support optimized scalability by functioning off the blockchain. Specifically, transaction validation occurs off-chain using 

 and smart contracts. After validation, confirmation is sent to Ethereum, which can process roughly 15 transactions per second (

). Using an optimistic rollup solution, Arbitrum’s technology can process 40,000 TPS. More than that, all of the Ethereum developer tools are available on the Arbitrum network, including the EVM smart contract. Thus, the Arbitrum technology’s design allows developers to create and launch DApps on Ethereum faster, easier and with lower fees.

The advanced functionality and benefits of the Arbitrum ecosystem are rooted in its features. While this solution is relatively new and continues to develop, its features and capabilities have enabled it to remain among the top Ethereum Layer 2 solutions. Let’s look at Arbitrum’s core features.

 optimistic rollup protocol completes bulk transactions off the chain before they’re posted. The rollup protocol results in lower fees for users and enhanced Layer 1 performance. Recently, the 

 was completed, enabling the use of standard tools and languages rather than requiring the use of custom designs. It also reduces transaction costs, is compatible with 

, supports substantially greater throughout and delivers other benefits.

, and is specifically designed for DApps, social projects and game development. Nova is suitable for high transaction volumes, and it notably has a fallback to Rollup. In addition, its users benefit from fast transactions and low transaction fees. Another advantage is its compatibility with EVM for optimized functionality.

 of the two chains that are impacted by the DAO transition: Arbitrum One and Nova. Several components impact the status of this decentralization, including chain ownership, validator ownership, Data Availability Committee ownership and sequencer ownership.

The Arbitrum Foundation has most recently created 

. Through this solution, developers can create their own 

 Layer 3 blockchains. This allows the system's users to make customizations to suit their projects’ needs. More than that, Arbitrum Orbit supports the 

 the Arbitrum Foundation will finally launch its long-awaited token, known as ARB. ARB will have an initial supply cap of 10 billion tokens with a maximum 2% inflation rate per year. The community will own 56% of the tokens, with 12.75% being airdropped to eligible users on Mar 23, 2023. The rest of the community-owned tokens will be distributed to users over time. The remaining 44% of the total supply of tokens will be allocated to investors and core contributors. 

Offchain Labs, the creator of Arbitrum, used an 

 to determine which of the early users of Arbitrum would receive the airdropped tokens. Engagement with Arbitrum in the past was taken into account, including bridged funds on Arbitrum One, the number of completed transactions over the last several months and the number of assets deposited into Arbitrum. For every meaningful action that a user has made before the Feb 6, 2023 snapshot captured at block height #58642080, they will be awarded one point. 

Based on the number of points earned, they’ll be awarded the corresponding number of tokens:

Other Layer 2 projects have already launched their native tokens, such as Optimism (OP). According to 

, Arbitrum currently holds approximately 54% of the market share on Ethereum. DAO governance is likely to be a critical aspect of its continued dominance. 

Prior to Arbitrum’s transition to DAO governance and the ARB airdrop, its total-value-locked market share on Ethereum was $3.85 billion. This is expected to increase after the transition. Prior to the airdrop, users can have a say in the project’s management by nominating delegates. 

 is widely regarded as being in the best interest of the community and the ecosystem. One of the key benefits is expected to be increased innovation.

When the Arbitrum Foundation officially launches the 

, it will establish community governance. ARB token holders will have voting rights that give them power over the Arbitrum network’s protocol and development. 

While the ARB holders can adjust the code, the changes will be audited. In addition, bugs will be fixed by a security council. While Offchain Labs will no longer maintain governance control, it will continue to develop Arbitrum technology after the community members vote on making specific improvements and changes.

 their interests and goals. The elected delegates will review and vote on the DAO’s proposals. The Arbitrum DAO makes decisions on how revenue is used, steers technological upgrades and makes other key decisions. As a self-executing governance organization, its voters directly impact on-chain decisions. No intermediary is required. Notably, Arbitrum is the first Layer 2 solution to use self-executing governance.

Arbitrum came online in 2021 as an Ethereum Layer 2 solution, quickly gaining traction by providing developers with a faster, easier way to create with minimized fees. In March 2023, the Arbitrum DAO was introduced with the release of the long-awaited ARB token. This governance token puts important decisions in the hands of the community, rather than Offchain Labs. 

 solution will soon be available as well, and it will further add to developers’ functionality by supporting additional programming languages. Another planned upgrade gives developers the ability to create their own Layer 3 solutions.

Arbitrum’s native token is ARB. It will launch on Arbitrum One, and it will specifically allow community governance. Token holders vote on the Arbitrum One chain. As mentioned, the token has a maximum inflation of 2% annually, and it can only be claimed and minted on Arbitrum One. 

Shortly after the ARB airdrop, the Arbitrum token will be available for trading on Bybit, one of the world’s leading exchanges. Simply 

In celebration of the Arbitrum airdrop, Bybit has also introduced 

 for users to take part in to earn more. The events will run from Mar 23–31, 2023.

Interested in earning 25 USDT? Simply deposit at least 250 ARB into your Bybit Spot account during the event period to receive the 25 USDT reward! Please note that rewards are given out on a first-come, first-served basis.

As part of the Launchpool exclusive, Bybit is running an event where you can stake ARB to earn from the 150,000 ARB prize pool.

Attention to all users who are new to Bybit and have previously interacted with the GMX token! Register for a Bybit account, make your first deposit of 500 ARB from your wallet to your Spot account during the event period and complete 

 to earn 0.5 GMX from the 2,000 GMX prize pool. Please note that the wallet you use has to be the same wallet you used to trade on or provide liquidity to the GMX protocol on Arbitrum. Likewise, rewards will be given out on a first-come, first-served basis.

Trade at least 100 USDT with tokens such as ARB, 

 using a Spot Grid Bot on Bybit to earn a share of the 20,000 USDT prize pool. 

: Your Spot Grid Bot has to be active for at least 24 hours to be eligible for the reward.

In addition to these events, Bybit is also proud to announce that 

 now supports the Arbitrum Chain, along with the ETH, BNB and OP chains.

If you’re interested in trading other tokens within the Arbitrum ecosystem, you’ll be glad to know that Bybit also supports the ecosystem by offering these Spot Trading pairs: 

As a solution that enhances the developer experience with Ethereum, Arbitrum has quickly become the top Ethereum Layer 2 solution. While its history is relatively short, it has a track record of progressive improvements, such as Arbitrum Nitro and Arbitrum Orbit. In addition to the release of the long-awaited ARB token and the move toward community governance, Arbitrum plans to release Stylus soon. With Arbitrum’s utility and the likelihood of continued growth, ARB could be a solid investment. This is, however, not financial advice, and you are strongly encouraged to do your own research before investing.

Arbitrum is the leading Ethereum Layer 2 solution, providing an essential service to developers. It’s on track to maintain and even expand its popularity and utility in the months and years to come with its combination of planned improvements and current utility. Now that the Arbitrum DAO is coming online, and with more positive changes to come in the near future, this is a solution to start taking advantage of — and to keep watching.

Arbitrum (ARB): Transitioning Into a DAO With the ARB Airdrop

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