Arbitrum's ARB Token Plunges Amid Revenue Disconnection
The Arbitrum and Optimism Layer 2 networks are competing for dominance in Ethereum's scaling landscape. Despite processing several hundred million transactions monthly, Arbitrum's ARB token has fallen 74.5 percent from its September 2025 high. The token price has been disconnected from network activity due to the lack of a fee-sharing mechanism that routes sequencer margin to ARB stakers.
The Arbitrum network holds approximately $15.2 billion in total value locked, according to L2BEAT, but fees remain in the DAO treasury. This disparity exists because the governance has not yet implemented a mechanism that rewards token holders for their participation in the network.
Base, a Coinbase-backed network, surpassed Arbitrum's transaction counts in both the first and second quarters of 2026. Base generates revenue for Coinbase through its sequencer margin, contributing between $75.4 million and $82.6 million in 2025.