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  • The Arbitrum DAO has increased its Short-Term Incentive Program budget by $23.4 million, funding 26 projects with 21.1 million ARB tokens.
  • The decision, supported by a majority community vote, aims to support emerging builders and enhance the Arbitrum network’s capabilities.

The Arbitrum DAO has recently confirmed the allocation of an additional $23.4 million in ARB tokens to its Short-Term Incentive Program (STIP). This funding decision marks a notable expansion of the program’s budget to support a wider array of projects within the Arbitrum network.

Additional Funding for Diverse Projects

The decision to increase funding came after a community vote held between November 18 and December 2. The proposition aimed to distribute additional funds to projects that had previously received approval for a grant but remained unfunded due to the initial STIP cap of 50 million ARB tokens. The successful vote will see 21.1 million ARB tokens, valued at approximately $23.4 million, allocated to 26 additional projects.

This move was largely supported within the community, as indicated by the voting results: 216.7 million votes in favor versus 73.1 million against. This approval increases the total STIP budget to 71.4 million ARB tokens, allowing the round to fund 56 projects. The aim is to nurture diverse, emerging builders and foster a welcoming environment for new initiatives in the network.

Arbitrum’s Network Impact and Revenue

Arbitrum, a layer-2 solution designed to enhance transaction scalability on the Ethereum blockchain, has gained traction due to its ability to facilitate faster and cheaper fund transfers. Governed by ARB token holders, Arbitrum earns revenue through transaction fees.

According to DefiLlama, Arbitrum’s impressive performance includes generating over $180,165 in fees and $43,342 in revenue on December 1 alone. November saw the network accumulating fees of $5.93 million and revenue of $1.47 million. These figures underscore Arbitrum’s growing influence and financial stability in the blockchain sector.

The newly allocated budget includes substantial funding for notable projects like Gains Network, Wormhole, and Stargate Finance. However, PancakeSwap withdrew its proposal for 2 million ARB due to the KYC requirements of the STIP.

The decision to extend additional funding was not without its detractors. Representatives from the MUX protocol expressed concerns that this move could dilute project quality, advocating for a more discerning approach to funding. Other members of the Arbitrum DAO suggested that a full second funding round might have been a fairer method to include additional protocols in the incentives program.

Market Response and Future Predictions

Following these developments, the price of ARB tokens experienced an increase from $0.95 to $1.09. However, the coin marked a 0.98% decline. Despite this setback, market analysts remain optimistic about the long-term prospects. They predict that the expanded donations program could catalyze activity on the Arbitrum network, potentially driving the ARB price to $1.50 by December 30.

The Arbitrum DAO’s decision to enhance funding for its STIP reflects a strategic commitment to nurturing a diverse range of projects and builders within its ecosystem. While it has generated debate within the community, the move is seen as a positive step towards fostering innovation and growth in the blockchain sector. 


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