TokenRadar #002 – Arbitrum (ARB)
“Scaling Ethereum with speed – is ARB the most dominant L2?”
🔹 Quick Profile
| Feature | Details |
|---|---|
| Project | Arbitrum |
| Token | ARB |
| Category | Ethereum Layer 2 (Optimistic Rollup) |
| Blockchain | Runs on Ethereum, utilizes Optimistic Rollup scaling |
| Market Cap | ~$2.9B (April 2025) |
| Circulating Supply | ~2.65B ARB out of 10B total supply |
| TVL | ~$3.2B across dApps (source) |
| Daily Transactions | ~1.2M tx/day (higher than Ethereum on some days) |
| DEX Volume (24h) | ~$700M+ |
| Governance | Arbitrum DAO via Snapshot voting |
| Legal Entity | Arbitrum Foundation (Cayman Islands), created by Offchain Labs |
| Operating Company | Offchain Labs – core devs of the protocol |
🔸 Tokenomics
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Utility: Governance token for protocol upgrades & treasury
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No Gas Use: ARB is not used for transaction fees – only ETH is used
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Allocation:
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42.8% DAO treasury
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17.5% community airdrop
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27% team + advisors
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11.6% investors
-
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Unlocking: Major unlocks starting in March 2025
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Concerns: Centralized treasury, most supply still locked (68%+), no fee-sharing yet
🔸 Security & Audits
| Sub-Element | Details |
|---|---|
| Auditor(s) | Trail of Bits, Quantstamp |
| Audit Reports | GitHub Audit Summary |
| Last Audit Date | 2023 (Arbitrum Nitro) |
| Bug Bounty | Yes – via Immunefi |
| Risk Level | Low – secure, active monitoring, leading security partners |
🔸 Legal Entity & Governance
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Entity: Arbitrum Foundation – incorporated in Cayman Islands
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Governance: Snapshot voting via Arbitrum DAO
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Treasury: ~$4B in ARB managed via DAO proposals
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Criticism: Recent drama over treasury proposal in 2023 raised concerns over decentralization
🔸 Compliance Check
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Jurisdiction: Cayman Islands – typical for DAOs but limits oversight
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Regulatory Status: No SEC action known at this time
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Risk: Medium – offshore base limits enforcement clarity, but no history of violations
🔸 User Reviews & Reputation
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Reputation: Excellent among devs – high dApp migration from Ethereum
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User Sentiment: Strong due to low fees, fast tx, and ecosystem support
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Community: Active on Discord, governance forums, GitHub and X
🔸 Public Trust & Perception
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Transparency: High for a Layer 2 – strong documentation and dev access
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Brand Strength: Top L2 brand in DeFi
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Leadership: Public team at Offchain Labs
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Media: Widely covered, often cited as a flagship L2
✅ RateEx42 TokenRadar Score
| Category | Score (1–10) | Notes |
|---|---|---|
| 1. Innovation | 9 | Scaling solution with Nitro, new tech incoming (Orbit, Stylus) |
| 2. Use-Case & Demand | 10 | Top L2 scaling Ethereum – huge adoption |
| 3. Tokenomics | 6 | Governance-only, no fee-sharing, large % locked |
| 4. Security & Audits | 9 | Top-tier audits and bounties |
| 5. Community & Adoption | 9 | Most used L2 in terms of TVL + tx volume |
| 6. Liquidity & Volume | 9 | $700M+ daily volume across top dApps |
| 7. Market Cap vs TVL | 8 | ~$2.9B MC vs ~$3.2B TVL → healthy ratio |
| 8. Legal & Governance | 7 | Cayman DAO – working, but with past hiccups |
| 9. Compliance Check | 6 | No red flags, but offshore structure limits clarity |
| 10. User Reputation | 9 | Dev-favorite chain, loved for cost and speed |
| 11. Public Trust | 9 | Strong perception, growing adoption |
🔹 Final Score: 8.3 / 10
🔍 Conclusion:
Arbitrum is the dominant L2 solution for Ethereum right now. While the ARB token lacks deep utility, the protocol itself is rock-solid, secure, and widely adopted. If future upgrades (like Orbit or fee-sharing) increase token utility, ARB’s valuation could catch up to its usage.
