- Two addresses consolidated more than $2 million worth of ARB tokens via almost 1,500 other wallets.
- Some think this makes the significant uptick in activity on Arbitrum in the last months fake.
- ARB is trading 80% down since claiming started on Thursday.
The Ethereum Layer-2 space has been enjoying unprecedented activity over the past months. At one point, the combined amount of transactions from the top two Layer-2 networks – Arbitrum and Optimism – overtook the Ethereum mainnet.
However, now that Arbitrum has airdropped its governance token ARB, there seem to be indications that some of the activity on Arbitrum has been fake.
Is Arbitrum Activity Fake?
Arbitrum launched its ARB token on Thursday and airdropped more than 11% of it to early Arbitrum users. However, it seems that multiple people have gamed the system and were responsible for increased activity on Arbitrum.
According to blockchain analytics firm Lookonchain, two wallet addresses have amassed over 1.4 million ARB tokens from the airdrop worth more than $2.1 million at the time of writing.
How did they do that? Through massive airdrop farming: One wallet received ARB from 866 other wallets, while the other got it from 630 addresses.
To get so many ARB tokens via almost 1,500 wallets, the addresses had to make multiple transactions and engage in other network activities over a long period. That might explain why Arbitrum has become the dominant Layer-2 network.
ARB is currently trading at $1.43, down 80% on the day, according to data from CoinGecko. At the time of the launch on Thursday, ARB shot up to over $8 but went down substantially as more people started claiming their tokens and selling them.
On the Flipside
- It’s unclear who is behind the two wallets that have amassed substantial amounts of ARB tokens. Some speculate that it might be insiders or others close to the project.
Why You Should Care
Airdrop farming is increasingly becoming a risk to projects that reward their users. Centralization, fake volumes, and other issues might prevent other projects from airdropping their tokens to early users.
Read more about why users were upset about the Arbitrum airdrop day:
Arbitrum Users Outraged as Airdrop Launch Flops: Here’s What Happened
Read more about the SEC’s lawsuit against Justin Sun:
SEC Sues Tron Founder Justin Sun Over Fraud, TRX Wash Trading Scheme