Arbitrum launches $40M DeFi incentive amid intensifying L2 race
Arbitrum, the biggest Ethereum layer-2 protocol, has launched a brand new initiative designed to channel liquidity into decentralized finance.
The DeFi Renaissance Incentive Program (DRIP), announced on Sept. 3, will allocate as much as $40 million in rewards to customers performing focused on-chain actions quite than merely producing consideration.
The program, structured by Entropy and powered by Merkl, might be managed by Entropy Advisors beneath the course of ArbitrumDAO. According to the blockchain community, roughly 80 million ARB tokens have been earmarked for incentives throughout 4 distinct “seasons,” every specializing in a special nook of DeFi.
The first season, which runs from Sept. 3, 2025, by Jan. 20, 2026, prioritizes looping leverage on lending markets.
During this section, customers can earn as much as 24 million ARB in rewards by borrowing towards yield-bearing ETH and stablecoin belongings on authorised platforms.
According to Arbitrum, the construction is performance-based and protocol-agnostic, that means it can reward borrowing demand throughout a number of markets quite than focus liquidity in a single venue. Participating platforms embody Aave, Morpho, Fluid, Euler, Dolomite, and Silo, with collateral choices reminiscent of wstETH, eUSDC, and USDe.
Ethereum L2 ecosystem
The incentive scheme arrives at a time when competitors amongst Ethereum scaling options is accelerating.
Data from analytics platform Growthepie exhibits that just about 13% of Ethereum’s software income now originates on layer-2 networks.
In this house, Arbitrum retains a commanding lead inside the ecosystem. Data from L2beat locations its complete worth secured at greater than $19.1 billion, outpacing Coinbase’s Base at $14.7 billion and OP Mainnet at $3.6 billion.
These numbers replicate how Ethereum’s broader layer-2 ecosystem is maturing shortly, with networks competing to draw builders, customers, and liquidity at scale.
Considering this, the Ethereum Foundation has moved to scale back fragmentation throughout these networks.
In an Aug. 29 update, it introduced the Ethereum Interoperability Layer (EIL) as a trustless framework that allows transactions throughout totally different layer-2s.
The Foundation described EIL as a approach to give customers the expertise of “one Ethereum” whereas preserving its core ideas, together with censorship resistance, privateness, and open-source improvement.
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