Trader Joe seeks 1.83 million ARB from Arbitrum: Unveiling the motive
Journalist
Posted:
- TraderJoe submits a bid for a grant that will allow it to attract more users to Arbitrum.
- Arbitrum growth prospects improve and the same applies to ARB.
Arbitrum might be about to unlock a new level of growth thanks to TraderJoe, Avalanche’s largest decentralized exchange (DeX). However, that will depend on whether the Arbitrum DAO will approve TraderJoe’s new grant proposal.
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Trader Joe reportedly submitted a new grant proposal to Arbitrum DAO. If approved, Arbitrum will receive 1.83 billion ARB (worth just over $1.5 billion at current market value). The Avalanche DEX will reportedly use the grant to create more incentives aimed at attracting more users to the Arbitrum network.
Trader Joe, the largest DEX on Avalanche, has submitted a 1.83 million ARB grant application proposal to Arbitrum DAO. The proposal states that the grant will be used to support the Arbitrum One protocol, all of which will be used for liquidity incentives to attract more users to…
— Wu Blockchain (@WuBlockchain) September 26, 2023
So, why is Trader Joe pushing toward Arbitrum? Well, it turns out that Arbitrum is one of the fastest-growing Ethereum layer 2 networks. This is because many people use the network for its more cost-effective nature as compared to the Ethereum mainnet. As such, Trader Joe could benefit from access to Arbitrum’s growing user base.
The announcement about TraderJoe’s grant application proposal came at a time when Arbitrum was seen enhancing its focus toward growth. Arbitrum recently disclosed that it is working on interesting projects during its latest ecosystem development update.
Ecosystem Developments:
🏛️ Round 1 of the Arbitrum DAO Security Council Election is complete! https://t.co/sIbAaOCHWg
⚡ The Arbitrum Sepolia test-net is now live https://t.co/V8U8DCO0Sz
🌀 The New Arbitrum Portal is here! https://t.co/edKGD88WIm
2/5
— Arbitrum (💙,🧡) (@arbitrum) September 25, 2023
Will ARB benefit as the network ramps up its development efforts?
While TraderJoe’s application has not yet been approved, it underscores more potential opportunities to expand Arbitrum’s user base. This could in turn generate more value for both the network and the DEX. But where does this leave the ARB token?
Well, here’s some interesting outcome that we observed recently. ARB’s supply distribution recently registered a substantial dip in whale balances. Addresses holding between 1,000 and 1 billion ARB recently registered substantial outflows between 24 and 25 September.
Source: Santiment
Despite the observed dip in most whale addresses, the supply held by whales with over 1 billion coins (the pink line) grew substantially. This suggested that the top whales have been taking advantage of discounted prices to accumulate more.
This could explain why the weighted sentiment recently achieved its highest spike in the last four weeks.
Source: Santiment
ARB’s on-chain volume remained low despite the sentiment spike. Perhaps a sign that the optimism has not yet yielded a significant outcome in terms of demand.
Read about ARB’s price prediction for 2024
An assessment of ARB’s price action revealed that it did not dip as much as one would expect despite the recent sell pressure. This is because the accumulation by top whales may have prevented more downside. ARB exchanged hands at $0.82 at press time.
Source: TradingView
Furthermore, ARB’s Relative Strength Index (RSI) indicated that the bulls have been gaining strength and might be keen on maintaining the status quo. The Money Flow Index (MFI) confirmed that liquidity has overall been flowing into the ARB token.
