Vitalik Buterin lauds Arbitrum; ARB rallies 22% in 24 hours
- The Ethereum co-founder praised Arbitrum for becoming a stage 1 rollup.
- ARB’s price increased by 22% in 24 hours, indicating a drive toward $2.
A few hours after Vitalik Buterin gave Arbitrum [ARB] a good mark for being the only stage 1 rollup, the price of its native token jumped by 22%. Buterin, who is the co-founder of Ethereum [ETH], had a conversation about the L2 on Warpcast.
According to him, Arbitrum’s move to stage 1 means that the project has become the first L2 to inch toward real decentralization.
Being a stage 1 rollup means Arbitrum has met the five requirements of becoming completely decentralized. One of these conditions includes allowing users to exit without the help of permission operators.
Another is having a complete fraud-proof system in place.
For context, a fraud-proof enables on-chain scalability while acting as protection against incorrect state transitions. In his statement, Buterin noted that he would be glad if other rollups could get to stage 1 by 2024.
“I’m really happy we have one unambiguously stage 1 rollup (and a couple more very-close-to-stage-1 rollups) this year. Real decentralization. Let’s get to ten stage 1 rollups, and some degree of sequencer decentralization, in the next year.”
AMBCrypto observed the chart shared by the Ethereum co-founder. According to the details, showed that the OP Mainnet, zkSyncn Era, and Base were at stage zero.
This implies that the projects were only left with one requirement to become a stage 1 rollup.
How did ARB react?
At press time, ARB’s price was $1.59. Also, the price increase would be a relief to ARB holders who have had to endure an encouraging price action since the Arbitrum Foundation AirDrop to early users.
Though ARB is 86% down from its launch price, the 76.45% 90-day increase implies that the token could be on its way to a new high. One other factor driving ARB’s movement is ETH.
At press time, ETH had broken out and its value was changing hands around $2,389.
Furthermore, Arbitrum’s fundamentals as an Ethereum L2 mean that there is a high chance that the ARB strongly correlates with ETH. On the derivative end of the market, AMBCrypto considered the ARB’s Open Interest.
Using Coinglass data, the Open Interest had increased by 29% in the last 24 hours. Open Interest is the number of outstanding futures contracts linked to a cryptocurrency.
When the Open Interest increases, it implies a rise in open long/short positions. However, a decline in the Open Interest suggests a drop in liquidity allocated to contracts.
Read Arbitrum’s [ARB] Price Prediction 2024-2025
Considering the price action, the rise in Open Interest might trigger a continuation of the uptrend. So, it is not out of place to project a rise to $2 for ARB. However, market participants would need to watch out for ETH’s price action.
Should ETH slow down its momentum, ARB might do the same. At the same time, if ETH runs in the $2,500 direction, then ARB might breach the $2 mark.