ARB suffers despite Arbitrum’s soaring TVL: Here’s why

• Arbitrum saw a notable boost in TVL over the last few days.
• The price of ARB fell significantly as activity declined.

Arbitrum [ARB] witnessed a massive surge in TVL (Total Value Locked) over the last few days, overtaking contemporaries such as Base, Polygon [MATIC], and Optimism [OP] in the process.

Source: Artemis

Getting into gaming

Following a DAO proposal that received overwhelming support from token holders, Arbitrum will unlock a massive amount of their native tokens.

This can also be seen as a move to significantly strengthen their gaming presence on layer-2s.

At the time of writing, the proposal had passed with an overwhelming majority of ARB holders in support.

The proposal, dubbed the Gaming Catalyst Program (GCP), outlined a strategic allocation of 225 million ARB tokens worth over $255 million over a three-year period.

Source: Snapshot

This program will allocate tokens strategically. The larger portion, 160 million ARB, will go towards attracting developers through grants or direct investments, chosen on a project-by-project basis.

The remaining, 40 million ARB, will focus on building the infrastructure needed for these games to thrive.

This includes developing essential tools and other technical foundations specifically designed for on-chain games within the Arbitrum ecosystem.

Arbitrum faces some challenges

Despite these factors, in terms of overall activity on the network, there was a decline observed. Daily Active Addresses on the Arbitrum network fell from 1.5 million to 750,000 over the past few weeks.

Coupled with that, the number of Daily Transactions fell as well.

Source: Artemis

Realistic or not, here’s ARB’s market cap in MATIC’s terms

The price of the ARB token wasn’t doing too well either. At press time, ARB was trading at $0.9645, and its price had fallen significantly by 9% over the last 24 hours.

Network Growth also waned, implying new addresses were losing interest in ARB at press time.

Source: Santiment