Looking at the big pump of ETH, I am most optimistic about the potential of Layer 2 Tokens, especially $ARB.

Ethereum broke through the 4,000 mark and continued to rise to 4,606, benefiting the entire Layer 2 ecosystem.

Among the major Layer 2 Tokens, $ARB shows unique institutional adoption advantages and potential for technological breakthroughs, expected to achieve excess returns in this round of rising cycle. The analysis is as follows:

First of all, from the perspective of price and capital inflow, ARB's performance is not simply a rise, but carries a clear signal of capital preference.

After ETH broke through the $4,000 mark, Layer 2 tokens generally recorded a rise of 18%-20%, but the trading volume of ARB surged by 68% during this period, indicating that market funds are not only chasing the rise of ETH but are also actively increasing their positions in ARB.

This corresponds to the big pump of Arbitrum's TVL from August 1 to 13, which increased by $463 million, with a growth rate of 16.09%, creating a dual resonance between the funding situation and on-chain data.

Secondly, the institutional adoption advantage of ARB is something that other L2s cannot shake for the time being.

PayPal chose to expand the PYUSD stablecoin on Arbitrum, directly validating Arbitrum's position in the first tier of payment infrastructure.

With the SEC's non-securities designation for liquid staking tokens on August 5, it has cleared the barriers for institutional funds to enter. The ETH breaking through 4000 is just the fuse; the real accelerator is such clear policy benefits, and @arbitrum just happens to be at the center of the storm.

Looking at the valuation again, the relatively undervalued attribute of ARB is the core of the long logic.

According to the FDV/TVL ratio, Arbitrum is in the range of 9-10 times, which is not high compared to Polygon's 8 times. However, considering the DEX trading volume and ecosystem activity, ARB's capital efficiency is even better.

Moreover, compared to Optimism, Arbitrum has absolute advantages in ecological diversity, protocol integration, and developer activity, which means that in the period when ETH continues to strengthen, the valuation repair space for $ARB is very considerable.

The ecological catalyst should not be overlooked either; the technical trend is upward.

The ongoing "AI Month" initiative enables Arbitrum to take the lead in the new narrative track of AI + DeFi; on the technical level, as the most mature Optimistic Rollup, ARB continues to lead in transaction costs, security, and ecological breadth, which lays a solid foundation for its sustainability in the latter half of the bull market.

The technical indicators show that ARB is in the overbought range (1-hour RSI 81, 4-hour RSI 75), a pullback may occur, but the medium to long-term trend remains upward.

The open interest in the derivatives market soared by 42% in 24 hours, with 83% of the liquidations coming from shorts, reflecting that the bullish momentum has not yet been fully released.

So the conclusion is clear:
The strong breakthrough of ETH is just the prologue; the real protagonists are those projects that can simultaneously excel in four dimensions: capital inflow, institutional adoption, valuation repair, and ecosystem expansion, and $ARB is one of the few that fits this description.

In this round of rising cycle, it not only has the opportunity to outperform the average level of the L2 sector, but it may also become a high-multiplier amplifier for the ETH market.

Arbitrum Everywhere, $ARB is about to rise!

@arbitrum_cn #ARB