Yields on liquidity pools are paying out as much as 800% annualized as users rush to claim ARB tokens.

Entities providing liquidity to one of the most-anticipated token issuances in recent times made over $500,000 in profits in the first few hours, data shows.

Arbitrum’s governance tokens, ARB, went live for claiming on Thursday. The tokens can be used to vote on decisions on future changes to the Ethereum scaling protocol.

Uniswap data shows over $180 million in volume was traded on the ARB/ETH liquidity pool, netting $542,000 in fees for liquidity providers (LPs). LPs are entities that provide two different tokens to any decentralized exchange’s smart contracts – netting a cut of fees charged by that exchange on each trade.

Data shows 9,900 ether (ETH) and 9.34 million ARB are locked on the Uniswap liquidity pool at writing time on Friday. Another relatively smaller liquidity pool on Trader Joe locks up over $3 million.

Annualized yields on the Uniswap pool are between 90%-100% in Asian morning hours on Friday. The Trader Joe pool is a significantly larger 800%.

Meanwhile, Nansen data shows over 75% of all tokens were claimed as of Friday, with over 800 million ARB now held by users. ARB has a circulation supply of 1.2 billion and is trading at $1.30 with a market capitalization of $1.7 billion.

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Claims of “no airdrop” on a popular prediction market fell steeply in a single day after Arbitrum confirmed its airdrop on Thursday.

Crypto punters making bearish side bets on the possibility of layer 2 network Arbitrum issuing its native tokens were caught offside on Thursday as ARB tokens were launched.

Users of Arbitrum, which has seen immense growth in the past few months, were long since expecting the network to issue its native tokens. Arbitrum developers have previously denied they planned to issue tokens, but that didn’t dissuade traders from making bets on the possibility of the tokens in the future.

“Arbitrum airdrop by March 31st?” proved to be a popular market on the decentralized prediction market place PoolTogether, attracting some $4 million in volume since its March 10 launch.

Traders could place bets on “no” or “yes,” based on whether Arbitrum would both launch and airdrop a native token by Mar. 31. The launch was defined as a token deployed to mainnet in a way that was actively transferrable or tradable and was listed on an exchange, such as Uniswap.

Bets on “no” trended until Thursday. Such claims sold for 70 cents each until last week, sliding down to 64 cents on Thursday morning. On the other hand, claims on “yes” fell to as low as 20 cents in the past week as the expiry date approached – before moving to the 50 cent mark early yesterday.

The tables flipped after Arbitrum’s announcement, which may have come as a surprise to traders, confirmed the airdrop of tradeable ARB tokens starting March 23.

Yes claims jumped to 96 cents almost instantly, gaining a further 2 cents at writing time on Friday. Over $600,000 is now scheduled to be paid out to bettors on March 31.

No claims dumped to just 3 cents, netting investors a 95% haircut on their capital in just over two weeks, had they invested in the initial period.

All hope’s not lost for the no claims, however. A listing on any exchange has, as of Friday, not been announced – meaning the market could potentially still shift in their favor in the coming days.

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Arbitrum’s dominance among the layer 2 landscape continues to grow in quarter one of 2023, as the number of unique addresses on Arbitrum reaches an all-time high.

On Tuesday, Feb. 21, layer 2 scaling solution Arbitrum surpassed Ethereum in daily transactions, increasing Arbitrum’s dominance as the leading layer 2 rollup.

The number of daily transactions on the Arbitrum, the fourth-largest blockchain overall in terms of total value locked (TVL), jumped from 159,919 in daily transactions on Jan. 1 to over 1,103,398 at the time of press, representing a roughly 590% increase in less than two months, according to block explorer Arbiscan.

In comparison, the number of daily transactions on Ethereum increased a meager 46% in the same period to 1,084,290, per Etherscan.

Moreover, the number of unique addresses on Arbitrum’s network has reached an all-time high of about 2.95 million addresses, and data from TVL aggregator DeFiLlama shows that Arbitrum’s TVL jumped 81% since Jan. 1 to roughly $1.85 billion.

Arbitrum’s move ahead of Ethereum follows GMX, a decentralized perpetual exchange native to Arbitrum, overtaking Ethereum in daily fees last week. The growing layer 2 ecosystem has also seen many financial applications emerge like Camelot, Vela Exchange and Radiant Capital, which have all seen their users and transactions increase by over 100% in the past 24 hours, per Nansen data.

Despite Arbitrum’s boost in transactions and addresses, Arbitrum is still lagging behind Ethereum in terms of network fees.

At press time, Ethereum’s one-day fees stand at $6.7 million, while Arbitrum’s one-day fees sit at roughly $154,000, which is less than 2.3% of Ethereum’s network fees for the day, according to cryptofees.info.

The increased activity on Arbitrum may stem from users hoping and speculating about a potential Arbitrum airdrop, despite the lack of plans and announcements from Arbitrum developers about a potential token drop, according to Walter Teng, vice president of digital asset strategy at Fundstrat Global Advisors.

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