Offchain Labs, the developer behind the Arbitrum ecosystem, announced on Wednesday it would be airdropping, or releasing for free to select individuals, $ARB, a new token designed to govern the two Arbitrum blockchains.
The new cryptocurrency will be released on March 23 and sent to users of Arbitrum One, the larger of the two blockchains, and Arbitrum Nova, specifically designed for Web3 games and social media applications.
As part of the token offering, Offchain Labs, whose founders are a Princeton University professor and his two Ph.D. students, will establish the Arbitrum Foundation and an associated DAO, or decentralized autonomous organization, to govern the management and development of the Arbitrum ecosystem. Holders of $ARB will be allowed to vote on proposals submitted to the DAO, further decentralizing control of Arbitrum.
“Looking ahead, we’re moving closer and closer toward a decentralized financial system, with the Arbitrum technology at the very forefront,” Steven Goldfeder, CEO and cofounder of Offchain Labs, said in a statement.
The announcement follows Aribtrum’s sudden rise in less than two years as one of the most popular layer-2 blockchains on Ethereum. With $1.6 billion in total assets locked on the chain, according to DeFi Llama, Arbitrum outperforms by almost double closest competitor Optimism, another layer-2 blockchain that similarly makes Ethereum transactions faster and less expensive. Optimism already has a token, OP, with a current market capitalization of about $750 million, according to CoinMarketCap.
Goldfeder told Fortune that the planned $ARB airdrop was a means toward further decentralizing Arbitrum, not a cash grab. “I don’t care about the token for the sake of a token. I really don’t,” he added. “The token is a tool to decentralize and a tool to give governance power over to users.”
He said $ARB would only be used for governance, or providing individuals voting power in Arbitrum’s new DAO. Ether, the native currency on Ethereum, would still be used for transaction fees.
In addition to the announced release of $ARB and the foundation of the Arbitrum DAO, Offchain Labs announced on Wednesday the unveiling of Arbitrum Orbit, a means for developers to build layer-3 blockchains on top of the Arbitrum blockchains.
“There’s this increasing trend in the community where projects not only want to launch their own application, they actually want to launch their own chain,” Goldfeder told Fortune.
He said that as Offchain Labs, which announced that it raised $120 million in funding in 2021 at a valuation of $1.2 billion, loosens its control over Arbitrum, it will spend the next few months focused on onboarding developers who want to create their own layer-3 blockchains on top of Arbitrum’s network.