2 A very undervalued altcoin. 2 Explosive Large Altcoins… | Sovereign Crypto’s | Coins | January 2024

Arbitrum is a strong competitor to MATIC and, as an L2, outperforms MATIC in most metrics. One caveat with Arbitrum is poor token economics and value generation. That said, the fundamental principles and mass adoption of the $ARB approach outweigh the downsides of low-level token economics, which will most likely be resolved in the next 18-24 months anyway.

Arbitrum is arguably the second largest chain after ETH and BSC, and even surpasses SOL on several metrics. The market cap to TVL ratio is the lowest at 1.03. As a comparison exercise, $ARB’s current MC is $2.7 billion and Optimism’s MC is $3.3 billion. Optimism accounts for a third of the stable and TVL and a tenth of daily trading volume.

Arbitrum performs significantly better than other Layer 2 layers of ETH. What it lacks compared to Polygon is inflation, token unlocking, and token value generation. $ARB also has a solid SDK with an Optimistic rollup technology stack, but is technically inferior to Polygon’s zkRollups due to longer settlement periods, lower throughput, and lack of global liquidity.

As Layer 2, it is the most undervalued based on the above metrics, but its inflation and tokenomics shortcomings make it a close second to Polygon.

I am making bags as I write, with the goal of creating long-term hoddle bags for this bull market. My expectation is that the risk will be 10-15x lower in this bull market, and could go up to 20x from current prices if token economics improve.