Arbitrum's native token ARB hits new low since inception, whale selling off? L2 myth shattered?

After the launch and airdrop of Ethereum L2 Arbitrum ARB in March this year, both the ecosystem and token price have been closely watched. However, as the market continues to bearish, the price of ARB has been declining. Recently, a large ARB whale transferred a significant amount of tokens to Binance, causing the market price to hit a new low since its launch; how is the current ecosystem of Arbitrum faring?

On-chain Data: Whale Moves Large Amount of ARB to Binance

According to records from LookOnChain, a whale address transferred 3.8 million $ARB to Binance and converted it to ETH.

This address had previously transferred 17.62 million $ARB out of Binance in April this year, and at the time of writing, still held 13.78 million $ARB.

According to observations, this address accounts for only 0.1378% of the ARB holdings, ranking at 90. However, on September 11th, ARB has experienced a nearly 7% drop, making it one of the biggest decliners among the top 100 in market capitalization:

End of L2 Myth? ARB Still a Mainstream L2

At the time of writing, the network fee for transferring ETH on Ethereum is about 0.64; and L2 solutions, known for their efficiency and cost-effectiveness, maintain network fees over nine times lower, with Arbitrum being one of the lowest-cost L2 solutions.

Network fees for L2 solutions are all calculated in ETH, and Arbitrum, excluding the ZKSync Era with significant "airdrop boosting" behavior, contributes to the lowest network fees and total value locked (TVL), making it a leader in L2 solutions.

However, it can be seen that apart from Base's significant growth, the total on-chain assets value of other L2 solutions is declining.

Is ARB Only a Governance Token?

ARB is specifically used for "governance," which differs from ETH in Ethereum where price expectations are generated based on network supply and demand levels. However, the sequencer for L2 blockchains, currently brings in substantial income for Arbitrum, which can continuously fund the operation of the Arbitrum DAO.

However, for token holders, there may not necessarily be an interest in participating in governance. Therefore, there are also voices in the Arbitrum governance forum hoping that ARB can increase its "staking" utility. By increasing the incentive for staking, more users can be attracted to hold and stake, earning token rewards. However, this proposal is still under discussion.