ARB’s price has hit a new low due to a decline in total value locked (TVL), a decrease in active addresses using its DApps, and a general downturn in the crypto market.
Arbitrum is a leading scalability solution on the Ethereum network, but its token price dropped by 14.5% between Sept. 9 and Sept. 11, reaching its lowest point ever.
Investors are concerned about the reasons behind this decline and whether Arbitrum can maintain its competitive edge, despite having a TVL of over $1.6 billion.
One potential concern is the absence of fraud proof issuance since the launch of Arbitrum’s mainnet in August 2021. However, developers explain that this aligns with the system’s intended operation.
Governance proposals from Arbitrum’s DAO may have also contributed to the price downturn. These proposals include allocating tokens to address community needs and implementing a staking mechanism that could create inflationary pressure.
There are also concerns about liquidation risks on exchanges offering leveraged trading, as whales have been withdrawing and transferring ARB tokens.
The decline in ARB’s price can be attributed to a combination of dissatisfaction with governance mechanisms and a decrease in network activity, despite lower fees compared to Ethereum.
Summary:
– ARB’s price has reached a new low due to a decline in TVL, active addresses, and overall market conditions.
– Concerns include the absence of fraud proof issuance and governance proposals that may create inflationary pressure.
– Liquidation risks and declining network activity are also contributing factors.
– Unless there is an increase in transactions and user adoption, ARB may struggle to compete with other chains.
