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Arbitrum Uncovers New Reward Program In A Bid To Revive The Ailing ARB

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  • What- Arbitrum has outlined the new decentralized autonomous organization (DAO) revenue mechanism.
  • Why- This enables the token holders to reap the rewards of accumulated surplus fees.
  • What Next- The transaction fee on the Arbitrum One network consists of two units, including L1 and L2 fees.

Along with many other cryptocurrencies, the value of the ARB token, which is used to pay transaction fees on the Arbitrum network, has significantly decreased recently. The daily active users on the popular layer-2 rollup Arbitrum [ARB] declined by more than 17% in the last 24 hours. This has raised questions about the sustainability of the spike from Arbitrum’s two-week high.

However, the daily user graph failed to break through the 300k level, declining to 244k at the time of writing. Notably, the trading activity on the Ethereum [ETH] scaling solution remained lenient, as the transaction fees followed a flatter trajectory over the last few days.

Nonetheless, the falling demand is reflected in the price movement of the native token, ARB, which plummeted 16.8% over the last week to $1.12 at press time, according to CoinGecko. Things could shift as a positive revelation signaled the Arbitrum community.

The Arbitrum (ARB) reward program

Arbitrum has revealed its new decentralized autonomous organization (DAO) via its Twitter account. The token holders could reap the rewards of accumulated surplus fees through the revenue mechanism.

Further, the protocol will distribute 3,352 ETH, worth more than $6 million, to its DAO, as part of the rewards generated through fees. Additionally, the protocol has noted that it will create a revenue distribution mechanism achieved through the periodic triggering of a smart contract. This would facilitate the timely distribution of rewards.

On the other hand, the transaction fee on the Arbitrum One network consists of two units, including the L1 fee and the L2 fee. The L1 fee covers posting a transaction on the Ethereum network. Further, the L2 fee covers the cost of using resources on the protocol’s network. As per L2 Fees, sending one ETH on Arbitrum was just $0.23 compared to $3.14 on Ethereum.

More Reasons To Worry?

According to LBeat, the total value of assets held by Arbitrum is $5.82 billion at the time of writing, representing a drop of nearly 5% in the last week. Despite the decrease, Arbitrum continues to stand tall among L2s. It has a massive 66% of the total value locked (TVL) share.

Notably, the investors’ sentiment for ARB has turned negative. This is a clear implication that holders are anticipating more losses. Further, the MVRV Ratio, which is negative, indicates that most holders would entail losses if they sell at the current market price.

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