Why do some coins have value? (ARB)?

Could someone help me understand the value of certain coins like ARB? They don’t seem to offer any direct benefits to users. ARB, is an L2-Layer with significant implications, but the coin itself isn’t used for GAS fees or other purposes like Ether is on the main Ethereum network, which is necessary for utilizing DAPPs or transferring funds. The main incentive for purchasing these coins appears to be participating in DAO votes, but does that really matter? Comparatively, tokens like GMX and GLP have more apparent value, with GMX being a governance token that also receives 30% of the platform’s generated fees.

Bitcoin has gained people’s trust and its value is derived from its demand and its capacity to facilitate trade and business both within and beyond an economy. However, I don’t see how ARB serve as a store of value or a means of an exchange coin. Can anyone explain this to me?

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13 thoughts on “Why do some coins have value? (ARB)?”

  1. Arbitrum currently uses a centralized sequencer. But eventually the sequencer must be decentralized. The most logical way to do that will be a decentralized proof-of-stake network, most likely with ARB as the native staked asset. If that happens, the ARB token will be necessary to run a sequencer and collect MEV profits.

    If anything close to the level of activity happening on Arbitrum continues, then the value of those MEV profits will be huge. Therefore, I think most of the value assigned to the ARB token is a claim on that future source of value accrual.

  2. Governance is the main usecase for now. There is no big secret here, the token itself comes with no extra benefits.

    This is not a case for ARB exclusively, all governance tokens have the same “issue” but the market is sending differnt signals. It seems that people want to pay for governance rights. If they didn’t the tokens wouldn’t be worth anything.

  3. I the Arbitrum team really messed up by: releasing a governance token, then not really having a developed process by which the team was shackled adequately by that governance, then hosting a completely useless vote regarding the treasury, then not really addressing any recompense following their mishandling of the treasury if one accepts that token holders were meant to have a say.

    For my part mistake is large enough that I am considering going back to Polygon.

  4. The only useful feature it has right now is governance, and that’s somewhat questionable given the recent governance issues in the Arbitrum DAO.

    In theory, Arbitrum can charge a transaction fee premium for layer 2 transactions but that’s mostly a race to the bottom as other L2s can undercut them.

  5. Each governance token is different. In addition to Arb, other projects like Curve, Aave, Dia, and Matic fit the description of “governance token”, but each one of them works in a different way.

    I see some problems with ARB like the fact of being used solely for voting (not for gas). In addition to this, users that got the airdrop are less than 12% of the initial supply. Very weak among governance table.

  6. Price doesn’t matter at this point. All I can see is low $20m volume and nobody interested much in ARB.

    Optimism has more volume and less market cap.

  7. It’s valuable for large funds for voting rights. Your value theory should be based on how important it is for large funds to have ownership of ARB and if they do or do not already.

    The issue is ARB isn’t ETH and doesn’t go up or down with demand of the protocol (arbitrum L2) because you don’t need ARB to make tx’s. Anything else is speculation but the first thing i said is what I am thinking of for the value of ARB. Will they adapt ARB into the system for tx’s? maybe, but i don’t think thats the plan as of now..

  8. Distribution to a wide number of people + marketing to create demand = value

    The more fair and the wider the distribution the better.

  9. if u think that the future of finance is going to include Arbitrum, then using ARB tokens to cast governance votes will be important (as these will dictate the future of Arbitrum).

    if u think that the future of finance is not going to include Arbitrum, then you can sell your ARB tokens and pretend like you got a free stimmy from the Web3 gods.

  10. currently, the token don’t have value except it will be as gas for chain.
    but, the project have value because that i can reduce our gas fee.
    For GMX which related the project income with their token.

  11. It’s all speculation on future *potential* value.

    These tokens may be hot now but there’s no actual reason for them to have any value besides some voting in a confusing “governance” process. Is that worth a $1 billion or more market cap? Maybe, maybe not. Imo it’s overvalued AF.


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