Why Arbitrum now? The strongest fundamentals among Layer-2.
1- Leadership in Total Value Locked (TVL) of over $2.3 billion despite the bear market, leading all L2 networks according to DefiLlama.
2- Fee reduction after EIP-4844; the ‘Danksharding’ update reduced roll-up data costs by about 65%, increasing profit margins for projects on the network.
3- The largest ecosystem of applications (DeFi, Games, NFT) with leading projects like GMX, Radiant, and recently XAI Gaming on the Orbit layer.
• The roadmap that could spark demand for ARB
1. ARB Staking – the first yield source for token holders.
The proposal «Unlock ARB Utility & Align Governance» passed the vote and develops a staking contract that distributes a portion of the fees to investors in exchange for locking the token from 8 weeks to a year. Its activation reduces the effective supply and converts ARB into an asset that generates cash flow.
2. Convert the fees from the sequencer and MEV to the treasury.
AIP «Timeboost + Nova Fee Sweep» historically converts 1,885 ETH and regulates the ‘fast track’ auction to collect future MEV fees for the DAO, these flows will fund staking and incentives.
3. Massive incentive programs to attract liquidity
* 80 million ARB distributed in quarterly seasons focusing on specific activities (e.g. deeper liquidity wstETH/USDT) with strict performance measurement.
* A grant of $85 million to support infrastructure and emerging projects on Arbitrum according to an independent council.
4. Technological leaps that open new markets.
* Stylus (Rust/C/C++ contracts) — allows writing WebAssembly contracts approximately 10-30× faster than EVM with reduced gas fees, launched on mainnet on September 3, 2024.
* Orbit (Layer-3 Chains) — a framework for building dedicated chains sharing Arbitrum's security; the first gaming network XAI started production on it, attracting specialized game and DeFi developers.
* BoLD Fault-Proofs — a permissionless verification protocol that increases decentralization and reduces attack risks by opening appeals to any node, with open code since August 2023 and ready for full activation in 2025.
* EIP-4844 (Proto-Danksharding) — reduced roll-up data costs by about 65% leading to lower fees on Arbitrum and increased margins for projects.
• Encouraging future outlook for investors
1- Stabilizing the ‘income-generating asset’ model: with staking and Timeboost, ARB becomes similar to an L1 token with network fees.
2- Expansion in institutional usage thanks to BoLD and compliance and auditability advantages.
3- The flourishing gaming and DeFi sector with Stylus and Orbit, which means additional transactions and fees converting to yields.
4- A dynamic governance structure capable of rapidly injecting incentives (DRIP) and addressing competitive opportunities.
• How does this reflect on the price?
* Every % of ARB locked in staking reduces sell pressure; with 20-25% locked we start to see tangible scarcity.
* Increase in revenues transferred to the DAO + potential burning from fees raises the discounted valuation.
* In a scenario of successful execution and a general market recovery, a target range of $1-1.4 could theoretically be aimed for within 12-18 months (set it as an ambitious target, not a promise).
