TreasureDAO has made an announcement regarding its intention to transfer its Web3 gaming ecosystem away from Arbitrum [ARB]. In a voting proposal, the DAO stated that ZKsync would be more suitable for fulfilling its gaming requirements.
According to TreasureDAO, the majority of liquidity within the Arbitrum ecosystem originated from decentralized finance (DeFi) rather than gaming. Furthermore, the progress of Arbitrum’s initiative to support Web3 games was deemed as slow.
Expressing their disappointment, the DAO stated,
“We have been underwhelmed by the sluggish pace of the Arbitrum Gaming Catalyst Program (GCP) in initiating and backing gaming activities on Arbitrum.”
Treasure happens to be the leading gaming protocol on Arbitrum, boasting a Total Value Locked of $6.42 million as reported by DappRadar. This figure is nearly three times higher than the Total Value Locked of the second-largest gaming project on the layer-2 network.
Corresponding with this proposal, there has been a notable decline in dApp activity on Arbitrum. DappRadar data reveals a 33% decrease in volumes over the past 24 hours, amounting to $1.08 billion.
Challenges in Arbitrum Price Movement
The price of ARB faced challenges following a 0.5% decrease, settling at $0.517 at the time of reporting. The subdued performance was influenced by volatile price fluctuations across the broader market, leading to trader uncertainty.
Arbitrum was observed trading within a parallel channel, signaling the presence of bullish momentum. Nonetheless, this uptrend showed signs of weakening as ARB slipped below the midline of the channel.
The bullish scenario could be at risk if ARB drops below the channel and breaches the crucial support level at $0.508.
This particular support level has demonstrated its significance over multiple months, as each breach has resulted in substantial declines for ARB.
The Stochastic Relative Strength Index (RSI) stood at 40, indicating a prevailing advantage for sellers at the time. Furthermore, the Awesome Oscillator (AO) bars exhibited a red color, hinting at possible downward price movement.
Despite these indicators, bears had not yet assumed control over the price action, as the Stochastic RSI line remained above the signal line.
For ARB to counter the bearish scenario, it needs to reclaim levels beyond $0.55 for a bullish breakout above the upper trendline.
An increase in network activity might play a role in supporting a bullish recovery. Notably, Ethereum co-founder Vitalik Buterin commended Arbitrum for its advanced position compared to other layer 2 solutions in terms of maturity.
Data sourced from L2Beat indicated that Arbitrum holds the top spot for the largest layer-2 network by Total Value Locked (TVL).
However, within the past day, Arbitrum has trailed its major competitors, Optimism [OP] and Base, with the TVL of both networks rising by 3% and 4% respectively.