Arbitrum’s Market Cap Has Grown, But the ARB Token Is Near Its All-Time Low

Arbitrum’s governance token is a few pennies from its all-time low, data from CoinGecko shows.

In the past year, the price of ARB has declined 24% to trade at 77 cents, three pennies away from its record bottom of 74 cents. While ARB has been in a downturn, approaching its cheapest level ever, the cryptocurrency’s market cap has grown substantially in the same period. ARB’s market cap stood at about $1.27 billion one year ago and has since jumped over 75% to $2.23 billion.

The market cap of any cryptocurrency is defined by the number of total tokens in its circulating supply multiplied by the price of a single token. As such, market cap increases in a few ways; one common way is for a token’s circulating supply to remain the same, while its price increases.

However, in light of a declining price, another way to see market cap grow as in the case of Arbitrum’s governance token is for the token’s circulating supply to increase more than the price slump. Arbitrum’s circulating supply stands at about 2.9 billion tokens at presstime.

Token Unlocks for Next Three Years

The inverse relationship between ARB’s price and market cap comes as Arbitrum has seen a number of hefty token unlocks, referring to the release of tokens previously frozen to prevent large-scale dumping by investors during a project’s early days.

Arbitrum’s vesting schedule highlights how each month will see a token unlock until 2027. (Messari)

Data from blockchain research firm Messari shows that Arbitrum started substantial token unlocks in March when 1.13 billion ARB tokens became unfrozen, the L2’s largest one in the past year.

The March release jumpstarted a roughly 108 million ARB unlock every month “for the remaining three years,” according to the network’s governance documents, unleashing about 3.6 billion more tokens on top of the current unlocked token total of 6.4 billion. At current prices, each monthly unlock excluding the one in March 2024 is valued at $83 million.

The remaining unlocks are earmarked for the Arbitrum Foundation, Offchain Labs, and investors per Messari.

Arbitrum’s ARB token has fallen about 64% since reaching a local high of over $2.15 in March when the first big token unlock after the airdrop occurred.