Arbitrum Native Token ARB airdrop release is imminent, how to value it?
Decrypt Nivesh Rustgi
On March 16, the Arbitrum Foundation announced that the Native Token ARB will be airdropped to eligible community member wallets on March 23. As the Token airdrop time approaches, how to evaluate the value of ARB tokens has become the focus of attention of the community.
Analysts believe that because Optimism and Arbitrum both have a similar Layer2 network technology stack (Optimism uses OptimisticRollups and launched its Native Token in April 2022), Therefore, Optimism on the valuation of native Token OP can be used as a reference.
As of March 20, Optimism had a market value of about $839 million, with OP Tokens priced at about $2.63 and $314.8 million in outstanding supply, according to Coingecko data. By comparison, 1.275 billion ARB tokens will enter the market after the airdrop is completed on Thursday. Since the total supply of ARB tokens is 10 billion, it means that the total amount of ARB tokens in circulation is about 12.75% of the total supply.
Market value of Token Supply How many tokens will be traded in the market, excluding locked allotment tokens, which is calculated by multiplying Token price by supply in circulation. If ARB tokens are valued similarly to OP tokens, we can divide the current market value of OP tokens (about 839 million) by the supply of ARB tokens in circulation (1.275 billion) to find a potential price of ARBs of about $0.65.
In addition to estimating Token supply in circulation, there is another fully diluted valuation (FDV) method. Again using Optimism as an example, there is currently a total supply of OP tokens of about 4.29 billion and a fully diluted valuation of OP tokens of about $11.45 billion (based on total Token supply).
Fully diluted Token valuation is calculated by multiplying the market price of tokens by the total supply. Since this method takes into account unlocked tokens at a future date, it is more forward-looking than estimating market value based on outstanding supply. If full dilution of ARB tokens is similar to Optimism, So the estimated ARB Token price is around $1.15 -- divide the fully diluted value of OP tokens ($11.45 billion) by the total supply of ARB tokens (10 billion).
Given that Arbitrum will play an important role in the DeFi field, more information can also be provided by using total lock-in, which is the total amount of money deposited in the Token DeFi protocol network, which is an indicator to evaluate the liquidity of the DeFi ecosystem.
According to DeFiLlama data, Arbitrum is the fourth largest chain locked warehouse volume, currently about $1.77 billion. In terms of other blockchain Optimism, Ethereum ranked first with $29.1 billion, while Tron and BSC ranked second and third with $5.3 billion and $4.79 billion, respectively, and optimism of $982.4 million.
Based on lock-in volume, ARB tokens can be valued using a metric called the "TVL ratio," which is calculated by dividing lock-in volume by two items, such as Arbitrum and Optimism, as a measure of the relative strength of liquidity in two ecosystems.
According to the calculation rules, Arbitrum and Optimism "TVL ratio" is 1.8 (17.7/9.8). If this number is multiplied by the Token price based on the flux estimate and fully diluted estimate above, ARB tokens are valued at about $1.16 and $2.07, respectively.
Overall, based on the above valuation analysis, ARB tokens are likely to trade between $0.64 and $2.07, and most early Arbitrum users will be allocated 625 ARB tokens, The value of the airdropped ARB tokens they could earn ranged from about $400 to $1,250.
In addition, the maximum number of ARB tokens that some Arbitrum users can earn by airdrop is 10,250, meaning that about 4,400 wallets can receive ARB tokens worth between $6,500 and $20,600.