Currently the fully diluted market cap is at $12B ($1.5B in circulation), meanwhile Arbitrum is a competitor to Polygon, and Optimism. Polygon has a fully diluted market cap of $11B ($10.2B in circulation). For that fact alone, I'd say Arbitrum is really over valued. Optimism has a $9.8B fully diluted market cap ($720M in circulation). If the unallocated Arbitrum token make it into the circulation in the next few years, this is 87.5% of the token supply that can push the price down... that's a lot.
The airdrop of 11.62% of the token supply was done without Arbitrum receiving investment. This means the DAO needs to be generating $1.5B of revenue in order to be able to fulfill their value if everyone cash out their tokens. Meanwhile, the team own 2.7B tokens, more than twice the amount of token they released in the airdrop. Private investors committed $100M in 2021, some of which were Alamada Research of disgraced FTX founder. Not to say money can't be created out of thin air, but once investors, team, and the community start selling, it will be very painful for the price of the token. If this collapse happen in a few years, maybe they will have collected enough transaction fees to build a war chest to protect themselves partly, but there are many competitors looking to bank on the ERC20 L2 market.
I personally think they may experience a bit of growth during the next bull run, but their current value is priced in already, I wouldn't see any major growth potential for the moment. The only shiny piece of information is that Arbitrum has currently a lot more transaction volume than polygon, but I think that's only temporary since the airdrop happened recently. Show Less
