2 months ago 2 min read

Arbitrum (ARB) Token Drop And Arbitrum Community FUD Explained


The freshly issued ARB token was the subject of panic calls and FUD over the weekend in the Arbitrum cryptocurrency community as holders conjectured that the Arbitrum Foundation had lately sold a significant number of the coins.

One of the accounts that started the conversation on Twitter, Cringe.eth, underlined that on March 16—the launch date—the Arbitrum Foundation moved out 750 million ARB worth roughly $1 billion and then went on to transmit some of it to the Binance cryptocurrency exchange.

Additionally, Arbitrum Foundation proposed a suggestion, AIP-1, according to Eden Au, research director at a Web3 company, to use the moved-out tokens for administrative and operational costs. However, it was defeated by about 70% of ARB holders. The researcher shared blockchain data demonstrating the transfer of 50.5 million ARB from the foundation while claiming the proposal was only a formality.

Interestingly, the price of ARB was significantly impacted by these incidents, falling from roughly $1.5 to almost under $1. The community also claimed that the foundation purposely dumped the tokens on them only a few weeks after debut.

Nevertheless, Arbitrum explained that there was no 50 million ARB sale as represented on blockchain data in a lengthy discussion on Sunday, adding that:

"The goals of AIP-1 were to educate the community regarding initial decisions and ultimately have token holders signify their approval."

According to the foundation, a knowledgeable actor in the financial markets received a loan in the amount of 40 million ARB tokens. The remaining 10 million ARB were changed to fiat at the same time to pay for operating expenses.

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