Arbitrum whales sell heavily following the 750 million ARB confusion, is the L2 token in trouble?
- Arbitrum team clarified on Sunday that the proposal was a ratification and not a request and claimed a lack of communication as the issue.
- Claims show that investor and team tokens that were supposed to be locked for four years are being moved to exchanges already.
- ARB holders were already eager to offload their holdings, and the recent incidents might push them to pull away from the token further.
Arbitrum recently launched its native token ARB and airdropped it to its users. However, the launch is not exhibiting any positive reaction from the community, and to make it worse, the first Arbitrum governance proposal, AIP-1, further muddled holders.
AIP-1, Arbitrum’s new problem
The Arbitrum team on Sunday put forth a proposal that would result in 750 million ARB tokens worth nearly $1 billion at the time being transferred for admin and operation costs. But the community did not seem to be in favor of the same, as they felt that the tokens might end up being sold on the market, causing a price dip and eventual losses.
Consequently, the majority vote stood against the proposal, but the Arbitrum team repudiated the votes and went ahead with the proposal. The team, in a later post, clarified that the proposal was not a request but a ratification of the initial decisions.
Arbitrum foundation made a proposal (AIP-1) to allocate 750M ARB tokens for admin and op costs, but $ARB holders voted against it
— Eden Au (@0xedenau) April 2, 2023
Now they said the vote was just a formality, and they have already spent 50.5M (6.7%) of the proposed 750M $ARB
Your vote is not vote pic.twitter.com/lvhBbBesum
Furthermore, the community claimed that about 50 million ARB out of the 750 million ARB tokens were already sold. The team refuted these claims stating.
“Regarding the on-chain transfers of 50M $ARB tokens, 40M $ARB tokens have been allocated as a loan to a sophisticated actor in the financial markets space. The remaining 10 million has been converted to fiat and dedicated towards operational costs.”
The impact of the same was felt on the confidence of the investors, which already was pretty weak since the airdrop. This wavering confidence reached Arbitrum whales as well, who resorted to selling.
Arbitrum whales begin offloading
Over the last 24 hours, six whales were identified, both selling and buying ARB tokens. Only two whales bought ARB tokens worth $811,000 collectively and currently hold $13.9 million worth of tokens.
Two other whales sold $3.88 million worth of ARB, while the remaining two whales have shown no significant movement. On-chain data verifies this behavior as addresses holding more than 10 million ARB have noted a decline in their balance.
Arbitrum whale transactions
If this unsure selling continues going forward, ARB price could take a hit. As it is, the token is nearing all-time lows.
ARB/USD 1-day chart
Following the initial launch, ARB fell to $1.16 from $1.49. The altcoin recovered by some 20% over the next four days towards the end of March. But over the weekend following the AIP-1 confusion, Arbitrum price noted a near 15% drop to a trading price of $1.18.
Author
Aaryamann Shrivastava
FXStreet
Aaryamann Shrivastava is a Cryptocurrency journalist and market analyst with over 1,000 articles under his name. Graduated with an Honours in Journalism, he has been part of the crypto industry for more than a year now.
