There will be a new layer-2 token in the market this week, thanks to Arbitrum. The Ethereum scaling network announced last week the launch of its native governance token, dubbed ARB. The coin will be airdropped to eligible wallets on Thursday.
Now crypto analysts are trying to figure out how much the ARB token will be worth on the launch date.
Some analysts believe optimism’s OP token can help estimate the value of ARB, arguing that the two layer-2 networks have the same technology stack, which employs optimistic rollups. OP token hit the market last April.
ARB Price Estimation Using Circulating Supply
Data on CoinGecko shows that OP is currently priced at $2.73 and has a market cap of approximately $838 million. There are 314.8 million OP tokens in circulation.
On the other hand, the ARB circulating supply on Thursday will be roughly 1.27 billion, representing 12.7% of the total supply (ten billion tokens).
Circulating supply refers to the number of tokens trading on the market, while total supply represents the total amount of tokens available, inclusive of locked allocations. A token’s market cap is determined by multiplying its circulating supply with its price.
In case ARB hits a similar valuation as OP, then its price would be around $0.65. The analysts arrived at that figure after dividing the current OP’s market cap ($838 million) by the expected circulating supply of ARB tokens (1.27 billion).
ARB Price Estimation Using Fully Diluted Valuation
After estimating the ARB price using circulating supply, the analysts used FDV (fully diluted valuation). FDV is determined by multiplying a token’s total supply and its current price. As for OP, its FDV sits at $11.7 billion, considering it has a total supply of 4.2 billion tokens.
If ARB trades at the same FDV as OP, then it will be priced at around $1.17. This figure was arrived at after dividing the FDV of OP ($11.7 billion) by the total supply of ARB (10 billion tokens)
As per the estimations, ARB could be priced anywhere between $0.65 and $1.17.
Most early users of Arbitrum will receive 620 ARB tokens in Thursday’s airdrop, with 4,400 wallets set to collect 10,250 tokens each.