DEVELOPMENT
Let’s talk about the Arbirtum project, which will be listed on March 23, 2023.
Let’s start with tokenomics, fund prices, and the area of interest to buy.
Tokenomics
Arbitrum’s total supply (ARB token) will be 10,000,000,000 tokens.
Arbitrum DAO treasury allocation
DAO treasury, 42.78%.
This is a very large allocation with an unknown distribution. Any amount of tokens can flow out of it.
Team Comment: “…More information about the allocation of individual DAOs will be added soon…”
Offchain Labs investors allocation
Investors, 17.53%.
The project raised $124 million in 3 rounds. Funds received 17.53% of the tokens.
1️⃣ Series B
August 2021 invested $100 million with a valuation of $1.2 billion.
Lead investor: Lightspeed Venture Partners (no Tier).
Weigh the investment against the appraised value and it turns out they bought 8.3% of the company. Let’s assume they were given exactly the same 8.3% token issue for that. This is usually the case. There are nuances, but now let’s go the simple way.
The whole 10 billion issue means the funds got 830 million tokens for $100 million.
It turns out they have 👉 a price of $0.12 per token.
From 17.53% subtract 8.3% = 9.23% for 2 rounds.
Let’s assume Seed bought 5% and Series A bought 4.23%. Then count
2️⃣ Series A
April 2021 Invested $20 million.
Lead investor: no data.
Let’s assume they got 4.23%, i.e. 423 million tokens.
It turns out they have 👉 price of $0.047 per token.
3️⃣ Seed Round
Invested $3.7 million in April 2019.
Lead investor: Pantera Capital (Tier 1).
Let’s assume they got 5%, i.e. 500 million tokens.
It turns out they have 👉 a price of $0.0074 per token.
The range of prices is from $0.0074 (assumption) to $0.12 per token.
I suggest to be guided by the average price 👉 $0.06 per token.
Allocation of tokens and what investors will earn
All investors will have a blockchain for 12 months (until the end of March 2024) and then linear unlocks for another 36 months (ending in 2027).
Investors will not have any tokens at the start of sales. The first tokens will be available 12 months later (March 2024).
Also, no options are presented for additional earnings on tokenized tokens (staking, farming, etc.).
Can investors get their hands on tokens?
They can if they are airdropers :).
They can if they are software developers.
Allocation Users of the Arbitrum
Airdropers, 11.62%
At the start of sales, all 11.62% of tokens will be available to Ardropers.
There will be 1.16 billion tokens on the market without any restrictions or lures in the form of steaking/farming.
Allocation of DAOs building apps on Arbitrum
App Builders, 1.13%
App builders will get 1.13% of tokens or about 113 million tokens at launch.
Exchange listing and price
The start of trading on March 23:
Bybit – 1 p.m. (UTC)
Bitfinex – around 13:00 (UTC)
Binance – 17:00 (UTC)
Gate – no start time details
Kucoin – no start time details
Huobi – no start time details
What could be the starting price of a token
The Initial supply listing will have 1.27 billion tokens (12.7% of the issue).
Let’s compare with the Optimism project.
Optimism had a capitalization of $329 million at launch (3.06.22). The price of token was $1.54.
It turns out the initial supply was 213 million tokens, i.e. about 5% of all tokens (maximum issue is 4.294 billion tokens).
Arbitrum launches 12.7% of all tokens into the market. That’s a lot to start with no stacking to keep tokens from draining.
At the same time, Arbitrum’s TVL is twice as big as Optimism’s, and trading volumes are 9 times bigger.
Let’s assume that Arbitrum’s current capitalization will be twice as large as Optimism at the start, i.e. $650-700 million with 1.2 billion tokens in the market.
It turns out the price per token is $0.55.
Could the price be significantly higher than $0.55 per token?
Yes, if the team sells its tokens, with the desire to sell at $1.5-2 per token in the hands of hamsters.
First scenario, if the team is able to sell 150 million tokens for a notional $1.5, they will have $225 million in their hands, for which they can gradually buy back their tokens from the market at $0.2 per token.
The second scenario is if the team is able to sell 300 million tokens for a notional $0.75 per token. They will get the same $225 million, but the price will be more humane.
Where does the team get 150-300 million undeclared tokens from? The team allocates a lot of liquidity in steibles and tokens for their market makers to trade on all those exchanges. There is no way without that.
Thus, under this manipulation, there will be no tokens left in the market by the AIRROPers, and the team will have full control.
Whether this will be the case, I can’t know. It’s an assumption based on the fact that listing on so many exchanges is not done for the convenience of the Airdropers or users. The team must want to make money from such a powerful listing.
Let’s talk about the pros and cons in a big way:
Pros
1.Simultaneous listing on many exchanges, especially Binance.
2.TVL is twice as much as Optimism. This is important because users brought their money there.
3.The possibility of manipulation in terms of price acceleration into the zone of $1.5-2 (the assumption described above).
Minuses
1.A large Initial supply (12.7%).
2.All Initial supply is held by the initial sellers, which means they will put pressure on the “glass.
3.There are no mechanisms of price rolling (staking, pharming).
4.There is no direct interest of funds in explicit price acceleration at the start (they have no tokens).
Conclusion
What prices should be considered the most interesting to buy?
Perfect – below $0.2
Perfect – below $0.3
Good – below $0.5
What price do we consider the most interesting to sell?
Anything over $1.
