Arbitrum (ARB) Falls to All-Time Low as Network Utilization Metrics Decline

ARB price falls to new low due to lower TVL, lower active addresses engaging its DApps and a general malaise in the crypto sector. the market is wreaking havoc.

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Arbitrum has become a leading contender among Layer 2 scalability solutions on the Ethereum network, boasting significant total value locked (TVL) and notable activity. However, between September 9 and 11, the price of Arbitrum (ARB) tokens saw a sharp drop of 14.5%, marking its lowest point in history.

Investors are now eagerly seeking insight into the factors behind this move and wondering whether Arbitrum still has a competitive advantage, especially since regardless of the ARB token's performance, the network's TVL exceeds 1 .6 billion dollars.

Arbitration (ARB) against competitors Polygon (MATIC), Optimism (OP) and Loopring (LRC). Source: TradingView

It's worth noting that last week was tough for most cryptocurrencies, but among Ethereum scaling solutions, none saw a decline of more than 9%, with the exception of Arbitrum.

ARB governance proposals bring questionable benefits

A potential source of concern comes from the absence of any instances of issuing evidence of fraud since the launch of the Arbitrum mainnet in August 2021. Offchain Labs confirmed this information to Cointelegraph on September 4. The developers, however, explained that this situation corresponds to the intended operation of the system, as validators with malicious intentions risk losing their entire stake. Therefore, this data is unlikely to have had a significant impact on the price over the past week.

Additional factors that may help elucidate the recent price decline are associated with Arbitrum's Decentralized Autonomous Organization (DAO) governance proposals. The first proposal, post...