Speculators flock to Arbitrum IOU tokens ahead of this week’s ARB airdrop

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Developers from the Arbitrum Foundation announced the launch of Arbitrum DAO and its native governance token, ARB, on March 16. Eligible users and developers will receive 12.75% of the token’s total supply of 10 billion on March 23, when the token will be deployed. 

Speculation around ARB began soon after the token launch announcement on OTC desks, derivatives exchanges and spot exchanges via IOUs (I Owe You).

ARB tokens gain steam in pre-launch trading

BitMEX launched the derivatives contract for ARB June futures on Monday around 11 p.m. EST. The futures contracts were trading at around $1.30 at the time of writing, implying that traders are betting that ARB’s price will be near this amount by June’s end.

The futures contract allows speculators to bet on the token’s price and Arbitrum airdrop receivers to hedge their holdings. Eligible ARB holders can buy a short futures contract to sell ARB tokens at a specific amount, protecting them against the downside in the token’s price post-launch on Thursday.

ARB/USDT monthly derivatives contract price on BitMEX. Source: BitMEX

Some private Discord and Telegram OTC desks are witnessing active trading of ARB tokens for prices between $1 to $1.50. This trade is executed via a transfer of ownership of Ethereum wallets that are eligible for ARB airdrop.

The trading prices on futures contracts and OTC groups align with the estimated value of ARB tokens based on a comparison with Optimism’s OP token valuation.

Analysts on Crypto Twitter have suggested that ARB token price could fluctuate between $1 to $2 shortly after launch. Optimism is another Ethereum Layer-2 network that launched its token in May 2022.

Related: Arbitrum token finds its way to OTC market before airdrop

Besides futures contracts, some exchanges like Hotbit and XT are dealing in IOU tokens that entitle holders to an equal amount of ARB tokens upon launch. The two exchanges have done $2.7 million in volume in the 24 hours since launch on Monday. The IOUs are trading more than six times higher than BitMEX derivatives at around $8.31.

Almost all top crypto exchanges like Bitfinex, Binance, Huobi, and Bybit announced ARB listing on March 23 launch day.

Given the significant pre-launch hype and immediate listing on top exchanges, the token’s price will likely exhibit significant volatility shortly after launch.