What Happened on May. 10th | Arbitrum is a very Profitable Business, but unrelated to $ARB token

Layer 2 rollups operation have costs including Layer 1 data publication, L2 operator cost, etc, and the revenue is from users's transaction fees. One KOL, James Ho, calculated Arbitrum's annualized revenue to be over $100 million, and the profit margin is around 30-40%.

The primary expense of Layer 2 is the cost of data posting on Layer 1 Ethereum. EIP-4844, which is intended to cut this cost by 90-95%, will be included in Ethereum's next update. This indicates that Arbitrum's profit will skyrocket.

Arbitrum's primary challenge is not whether substantial fees can be collected; they can and will be very profitable. However, it is unclear how these values would be distributed to $ARB token holders, as the token is currently a pure governance token with no specified utilize such as fee accrual or burning mechanism.

Biggest Gainers & Losers

Headlines

Market Makers Jane Street and Jump Crypto Pulling Back from Crypto Trading in US: Market makers Jane Street and Jump Crypto are pulling back from crypto trading in the US as regulations tightened in the industry, Bloomberg reports.

Hot projects on the market

ParaSpace Founder Claims One Multisig Taken Over by Former Employees Amid Serious Internal Conflicts

Ordinal-based DEX BisoSwap Announces Deployment at BRC-20

Manta Network Collaborates with Arbitrum for Private Soul Bound Tokens (zkSBTs)

Aragon Cancels Planned Token Holders Control over $200M Treasury and the DAO

OpenSea Pro Supports NFT Purchase with $PEPE

Other news in case you missed it:

3AC Co-founder Zhu Su Obtains Restraining Order Against Arthur Hayes in Singapore

Chiliz Chain, a Sports and Entertainment Focused Layer1 Blockchain, Goes Live on Mainnet

Hong Kong’s OSL Asset Management gets license to invest in blockchain and Web3

Tether Q1 2023 Report: Reserves Surplus Reaches All-Time High of $2.44B, up $1.48B in Net Profit

Fundraising

Web 3 Music Platform Limewire raised over $16M through Token Sales