What's $ARB Token Value?

Good morning?

The white house?blasts?crypto in its annual economic report.

A tonal change, from somewhat agnostic to adversarial. The report states that there’s little value in crypto, urging lawmakers to “apple the lessons that civilization has learned… in regulating crypto assets.”

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In Today's Issue:

• What Matters:?Sushi received SEC subpoena?
• Case Study:?What’s $ARB token price??
• Governance & Features:?Maker endgame development?

Narratives: Still on?Arbitrum. Pay attention to protocols that received a lot of $ARB tokens such as GMX and MAGIC.?Incentive programs and pool2 rewards?will start.

This newsletter is co-written by Marco Manoppo

WHAT MATTERS

SEC ?? Sushi - This is How I Roll..

State of play:?DeFi protocol Sushi and its CEO Jared Grey got?served?by the SEC with a subpoena. The DAO is cooperating, but seeks?$3M in USDT?for its legal defense. The vote is ongoing with?75% saying yes.

• The funds will come from a combination of:?Kanpai fees, grants, and selling SUSHI on the market?
• The funds will cover all legal expenses including attorneys’ fees for core contributors that have been active?since the ratification of Sushi 2.0.
• If the funds deplete, the DAO will make $1M available until all legal proceedings conclude.

Why it matters:?This is another landmark legal battle that will set huge precedent for builders and investors in the future.?Sushi is an important aspect of the DeFi ecosystem. As a de-facto DAO without any real leaders, legal action against Sushi indicates that DAOs are not safe from regulatory scrutinies.

So how does this affect web3 builders and investors?

Find out here

CASE STUDY

What's $ARB Token Value?

State?of?play:?$ARB token airdrop will happen tomorrow, March 23rd. 1.275 billion worth of $ARB token will be available. Large exchanges are already announcing listing and trading pairs. Let’s take a look at how people are valuing $ARB.

$ARB IOU on various centralized exchanges traded at around $10 at launch.

It’s now?trading closer to $7, which implies a?market cap of $8.9 billion?and a FDV of $70 billion. For reference, this will put Arbitrum in the?top 11?crypto assets by market cap, right?between Polygon and Solana?

However, that’s an optimistic outlook.?Let’s take a look at a few more case scenarios:

• @OlimpioCrypto?-?$0.65 - $1.20?| Estimation is based on moderate to optimistic evaluation of Arbitrum’s TVL, FDV, and % of tokens unlocked.
• @Artemis__xyz?-?$1.60 - $2.52?| Estimation is based on Arbitrum’s TVL, fees, or daily active addresses.
• @InsiderFuture,?$4 - $6?| Estimation is based on Arbitrum’s FDV/TVL ratio by looking at the average FDVL/TVL ratio across other L1 and L2 protocols.

0xHamz made the most interesting?observation. Rollups like Arbitrum makes money from sequencer margins. This margin comes from processing transactions off chain at a cheaper fees before batching it back up and logged onto the L1 chain.

If every transaction costs x and it costs y for Arbitrum to batch these transactions, its?sequencer margin is x - y. This translates to?$0.25 per $ARB?at the current daily transaction run-rate of?1 million transaction per day.

Our take:?

Arbitrum will?trade at a premium. The secret sauce is?EVM liquidity + being “fast enough”?for unique dApps such as GMX and MAGIC. While Solana is faster, it is further removed from the center of on-chain liquidity, Ethereum and other EVM chain.

FEATURES & GOVERNANCE UPDATE

Maker Endgame Overview

MakerDAO’s next step.?Rune Christiensen, founder of the leading decentralized stablecoin protocol Maker, has published a thorough explanation of the Maker endgame and governance revamp plan?

• Endgame will establish Constitutional Voter Committees (CVC), which are open structures composed of MKR holders. CVCs will then?propose key decisions known as Governance Strategies.
• Endgame will implement The Sagittarius Engine (SE), which will encourage MKR holders to?lock and delegate their tokens for a Governance Strategy. It will be similar to the process of picking a political party in a multi-party democracy. SE users will receive compensation for their participation.
• Endgame will restructure MakerDAO’s governance hierarchy, establishing smaller?SubDAOs with their own governance tokens.

Why it matters:?The plan has been a controversial one, with brilliant people arguing for or against the plan??-- which isn’t surprising as it will be one of the most significant update to one of the most important protocols in DeFi.

Other notable feature updates:

• MakerDAO?clarifies?endgame plan.
• MakerDAO?implements?emergency circuit breaker.
• Balancer?goes live?on Gnosis chain.
• Radiant?launches?version 2.
• Nexus Mutual?launches?version 2.
• Uniswap?goes live?on BNB Chain.
• Stargate?unwinds?token re-issuance.
• Sturdy?announces?airdrop.
• Kava?announces?V13 upgrade.

QUICK BITES

• Coinbase?pauses?support for SigNet.
• Coinbase?argues?an arbitration case in US Supreme Court
• White House?blasts?crypto in economic crypto.
• Sushi?hits?with SEC subpoena, seeks $3M legal defense fund.
• EU’s MiCA?schedules?debate for April 18.
• IRS?formalizes?NFTs tax treatment as collectibles.
• FTX?sues?control of Bahamas Assets.
• Florida?proposes?law to band CBDCs.
• Polygon-Immutable?partners?to expand web3 gaming ecosystem.
• Euler Exploiter?wants?to return funds.
• Sony?files?a patent for NFTs related with in-game assets.

MEME & NOTEWORTHY READS

• Matti’s?read?on global volatility and the rise of credible neutrality.
• @lookonchain’s?thread?on top 6 airdrop hunters strategy.
• Coinbase’s?read?on Proof-of-Stake staking services rulemaking petition.