After a prolonged downtrend, Arbitrum (ARB) recently broke out of a downtrend channel. The altcoin surged to a two-week high of $0.085 before reversing slightly.
At press time, ARB was trading around $0.083 after rising 10% on the daily charts. During the same period, the altcoin’s volume surged 118% to $105 million, indicating strong market participation.
Arbitrage bounces back on Robinhood channel fee sharing
The ARB rebound was fueled by positive market news. Arbitrum developer Steven Goldfeder announced that 10% of fees collected on Robinhood Chain and other Arbitrum L2s will be directed to the Arbitrum ecosystem.
He also added that 8% goes to the treasury controlled by token holders and 2% to development. Finally, 100% of fees collected on Arbitrum One will go to Arbitrum’s treasury. This tokenomics approach is designed to counter the market inflation that is weighing heavily on Arbitrum’s native token, ARB.
Are Robinhood Chain fees enough to offset market dilution?
Since going live, Robinhood Chain has seen massive growth, reaching record usage levels.
For starters, Robinhood DEX trading volume hit an all-time high of $560 million on July 8. This volume is driven by over 140,000 new addresses, suggesting significant demand.
As trading volume increased, on-chain fees and revenue increased. Data from DefiLlama shows that app fees reached $2.36 million on July 8 and $2.12 million on July 9.
For Arbitrum, the fee hike provides a lifeline as the team seeks to offset market inflation. Arbitrum remains extremely inflationary due to its monthly releases.
In fact, next July, 92.63 million ARBs, worth around $7.6 million, will enter circulation after unlocking. With the team promising to spend the funds generated by Robinhood on the ecosystem, these funds could at least reduce the pressure.
However, this means that the Robinhood channel must generate $8 million per month for Arbitrum and reinvest it. For now, this remains far-fetched, especially in the short term, and the inflationary threat remains for the ARB.
Can ARB’s current momentum hold?
Arbitrage rebounded strongly, as demand for the asset recovered, with buyers incentivized by positive developments in the ecosystem.
As a result, the altcoin’s Relative Strength Index has climbed to 54 at the time of writing, placing itself in bullish territory. This marked a strong return of buyers, further reinforcing the bullish momentum.
Historically, strong market demand has preceded better price performance. Therefore, if the Robinhood-driven narrative holds the market, Arbitrum is likely to make further gains, targeting the $0.09 resistance level.
However, if the promised investment in the ecosystem fails to absorb the pressure, the momentum will fade, with ARB possibly falling to $0.072.
Final Summary
- 10% of fees collected on Robinhood Chain and other Arbitrum L2 will go to the Arbitrum ecosystem.
- ARB surged 10%, hitting a two-week high of $0.085, amid renewed market demand.
