DeFi Development Accelerates as ArbitrumDAO Distributes 24 Million ARB Tokens

ArbitrumDAO Unveils $40M DRIP Program to Drive DeFi Expansion

ArbitrumDAO has launched season one of its $40 million DeFi Renaissance Incentive Program (DRIP), deploying up to 24 million ARB tokens to stimulate decentralized finance activity across the Arbitrum network.

The first season emphasizes leveraged looping strategies for yield-bearing ETH and stablecoins. Incentives are directed at major lending and borrowing protocols including Aave, Morpho, Fluid, Euler, Dolomite, and Silo, with users earning ARB rewards by borrowing against approved collateral types such as weETH, wstETH, sUSDC, and syrupUSDC.

Approved in June, DRIP spans four seasons with a total budget of 80 million ARB tokens, each targeting specific DeFi use cases to enhance liquidity, capital efficiency, and innovation throughout the ecosystem.

“This program creates an aligned framework: protocols driving meaningful DeFi innovation receive support, while users gain new ways to optimize strategies on Arbitrum,” the DAO said in a press release shared with CoinDesk.

Several protocols, including Morpho, Euler, and Maple Finance, expanded onto Arbitrum ahead of the DRIP launch, citing the initiative as a key growth catalyst.

“DRIP will enable Morpho to attract DeFi-native liquidity and provide deeper liquidity and improved rates for integrations like the Earn feature on Gemini Onchain,” said Kirk Hutchison, Chain Expansion Lead at Morpho. “Coupled with Arbitrum’s distribution network, the program sets the stage for our next growth phase.”

As the largest Ethereum layer-2 network with over 35% of L2 market share according to L2Beat, Arbitrum plans to run each DRIP season for four to five months, with performance reviewed by a DAO-approved committee. Successful strategies may receive renewed support, while underperforming initiatives will be adapted or discontinued.