Arbitrum airdrop competition, what opportunities do investors still have?

Author: Asher Zhang, BitPush

Recently, traditional financial markets have been facing continuous crises, but the crypto market has emerged from the panic with a small bullish trend. Apart from the Bitcoin ecosystem, one of the leaders in Ethereum Layer 2, Arbitrum, recently announced its airdrop rules, leading to a surge in market trading enthusiasm. Every round of major project airdrops creates wealth for a group of people; have you received an airdrop? What is the future valuation of the Arbitrum token ARB? What other projects in the Arbitrum ecosystem are worth paying attention to? If you missed this airdrop, how can you seize the opportunity next time? This article will explore these questions one by one.

Analysis of Arbitrum Airdrop Rules: "Wool Party" May Find It Hard to Profit

Since 2020, "airdrop farming" has become a large-scale wealth creation movement in the crypto market, with each major project issuing tokens and airdrops generating a wave of wealth effects. As more and more people join this wealth creation activity, many project teams have designed their "airdrop farming" strategies with increasing sophistication. So how is this round of Arbitrum airdrop rules designed? Will your airdrop farming be successful?

It can be said that this round of Arbitrum airdrop is not friendly to "wool parties"; the rules are designed to emphasize the participation of ecosystem participants and have established a witch-hunting strategy. According to official information, Offchain Labs and the Arbitrum Foundation collaborated with the data analysis site Nansen to design a token distribution model. The following image shows the main variables in the token airdrop distribution process:

This distribution model relies on Nansen's on-chain data, allocating qualification points based on the historical on-chain activity records of wallets. Wallet addresses must meet at least three scoring criteria to qualify for the airdrop. The following image shows which user behaviors can earn positive points:

By sorting through the various behavioral data of qualifying wallet addresses, it can be found that many must meet the following conditions: Wallet addresses bridged to Arbitrum One must have conducted more than ten transactions in two different months and have a non-zero balance at the time of the airdrop snapshot; wallet addresses bridged to both Arbitrum One and Arbitrum Nova need to conduct at least 25 transactions through Arbitrum One in two different months, and more than ten transactions on Arbitrum Nova; a wallet address that transferred assets worth over $250,000 into Arbitrum One must have conducted over 100 different transactions in nine different months, and the same wallet initiated more than ten transactions on Arbitrum Nova.

From the above, it can be seen that the difficulty of farming ARB airdrops is quite high, but the army of airdrop farmers is indeed large. Currently, the list of qualifying wallets includes 625,143 addresses, with the statistical period being from the establishment of Arbitrum One until February 6, 2023. Additionally, protocols that have community treasuries and have been actively promoting the Arbitrum ecosystem will also be invited to allocate some tokens for their communities.

Regarding Arbitrum's witch-hunting strategy, Offchain Labs has put in considerable effort. Witch addresses are often difficult to distinguish from genuine behavioral addresses, but they have different objectives: one is for actual use, while the other is for potential airdrops. Offchain Labs researchers use clustering algorithms on transaction data from Nansen Query's fromaddress/toaddress and integrate tracking and token transfers on Arbitrum and Ethereum to identify possible witch wallets. They also manually "check" potentially misreported data. For specific information on witch addresses, please refer to the Arbitrum Foundation GitHub.

Overall, the design of Arbitrum's rules this round is tight and not friendly to "wool parties" looking to farm airdrops; instead, it will more likely distribute airdrops to ecosystem participants. Furthermore, many ARB airdrops will likely reward high-frequency traders and whale users.

What is the Future Valuation of ARB? Opportunities in the Arbitrum Ecosystem

According to BitPush, on March 20, Binance announced that it would list ARB. As a leading project on Layer 2, what will be the future valuation of ARB? Additionally, what other opportunities exist in the Arbitrum ecosystem?

In the crypto market, comparative valuation methods are a common token valuation approach, so when considering the price of ARB, one can refer to other leading Layer 2 tokens like OP and MATIC. Twitter influencer Mr. Bear (@mz_crypto777) tweeted that the expected listing price of Arbitrum will be $1.74! 1) Initial circulation = 12.75% of the total supply (127.5 million tokens), 2) The FDV of ARB is acceptable compared to OP and MATIC. By comparing the FDV/TVL ratio with OP and MATIC, one can estimate the price of $ARB. (Note: Recent market fluctuations are significant; the above views are for reference only.)

From on-chain data, in February, two large sums were deposited into Arbitrum, with a balance exceeding $450 million, likely indicating the entry of speculative funds into the market. With the launch of the ARB token, it is highly probable that a new wave of funds will enter the Arbitrum ecosystem, and Arbitrum ecosystem projects are expected to experience a surge in speculation. Below, this article will mainly introduce some of the most noteworthy projects in the Arbitrum ecosystem from the perspective of on-chain data.

According to DefiLlama data, GMX overwhelmingly occupies 70% of the fee market share on Arbitrum, and Gains Network has already captured 7% of the fees since its launch in late December. Currently, the top five protocols by fees on Arbitrum hold the following market shares:

What other projects in the ARB ecosystem are worth paying attention to? Twitter influencer Superalloy.lens (@chrislee0033) tweeted on March 20 that RDNT is going live today, and top projects on ARB may have potential; please keep them on your radar. The token distribution of ARB, like OP, has a portion supported by the ecosystem, and the proportion is not small, so interact more when possible to reap the rewards.

Twitter influencer Defi Mochi (@defi_mochi) stated that from this chart, it can be seen that the best blue-chip DEX on Arbitrum, in terms of the ratio of circulating market cap to TVL, should be Camelot, while SolidLizard carries higher risks. Camelot's token economic model is well-designed, as its issuance and destruction volumes are expected to achieve a 1:1 ratio based on the rules.

The tokens RDNT from Radiant and Y2K Finance are both worth looking forward to. The data for these two projects is shown in the table below. Additionally, Y2K's strong performance during black swan events (such as during depegs) proves its potential as a risk-hedging asset in an effective investment portfolio. Furthermore, I am particularly optimistic about PlutusDAO, as it is positioned as a governance aggregator for Arbitrum. I believe that PlutusDAO incorporating plsRDNT into its platform will also be a positive event. PlutusDAO currently controls 89% of the liquidity for JONES-WETH, as well as 52% of the DPX token and 45% of the SPA token.

How to Further Seize Airdrop Opportunities in the Future

As we mentioned at the beginning of the article, receiving airdrops is a significant way to make money in the crypto market. If you missed ARB, how can you seize the next airdrop? Perhaps following smart money and observing their operations would be a good approach.

Lookonchain (@lookonchain) tweeted that they discovered six smart airdrop hunters who have almost received all large-scale crypto airdrops, including: $ARB, $OP, $BLUR, $SOS, $LOOKS, $ENS, $DYDX, $1INCH, $UNI, $HOP, $FORTH, $GTC, etc. Paying attention to their trades may help you not miss the next airdrop. Their addresses are as follows:

Address One:

0x6f9bb7e454f5b3eb2310343f0e99269dc2bb8a1d

Address Two:

0x11B1785D9Ac81480c03210e89F1508c8c115888E

Address Three:

0x70e7a6621f4cb3c3e073d0539899f49fc88424c0

Address Four:

0x78Ebe56BC138069557C89af35EB29023fF31Ae2c

Address Five:

0x000f4432a40560bbff1b581a8b7aded8dab80026

Address Six:

0xd56EE5Ba5A52e15f309108BDd6247C69B4F624C2

It is worth noting that there is a significant difference in trading costs between retail investors and large holders. If it is a leading project, the certainty of token value is relatively high; however, if the project token value is not high, the costs of frequent trading can be substantial, and retail investors need to consider their trades carefully. With leading Layer 2 projects on Ethereum gradually issuing tokens, paying attention to more yet-to-be-issued Layer 2 leaders like zkSync and StarKNet may be a good choice.

Conclusion

Overall, the design of Arbitrum's airdrop rules this round is more meticulous, aiming to distribute airdrop tokens to actual ecosystem participants and builders. With the expected influx of new funds following the listing of ARB, Arbitrum ecosystem projects are likely to see a surge. Compared to other Layer 2 leaders like OP and MATIC, the reasonable valuation of ARB is expected to be around $1.74. For how to seize airdrop opportunities, it is recommended that operators pay more attention to some smart whale addresses, which will likely enhance their chances of "wool farming."