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DeFi activity on Arbitrum has grown significantly following the start of a short-term incentive program.
In early October, the Arbitrum Foundation began disbursing ARB tokens for the first phase of a short-term incentive program. The move, designed to boost liquidity across DeFi protocols, will see roughly 50 million ARB tokens distributed to 28 Arbitrum-based protocols.
More than a month has passed since the incentive program went live, and the numbers suggest it has begun yielding results. According to data from IntoTheBlock, the total value of locked assets on Arbitrum has grown by 26% since the launch of the short-term incentive program.
At the same time, the number of users has grown by 27%, suggesting that the program is also meeting its objective of bringing new users to the layer-2 network.
On-chain data shows that GMX, a DeFi perpetual trading platform on Arbitrum, has seen the largest TVL growth in dollar terms, with roughly $100 million added. Similarly, Angle Protocol, a stablecoin protocol on the network, has seen its TVL grow by 5900% since the program’s introduction.
Like the other 26 protocols set to benefit from the Arbitrum Foundation program, GMX and Angle Protocol have introduced liquidity mining programs with ARB rewards, thus, users deposit more on their respective platforms to maximize yield on the DeFi portfolio.
Meanwhile, IntoTheBlock further reveals that lending protocol Silo Labs and market-making platform Gamma Strategies have used their ARB incentives more efficiently than others. Since the program began, these protocols have seen their TVL grow by nearly 60x and 50x, respectively.
Will Arbitrum (ARB) Price Follow?
The Arbitrum DeFi ecosystem, which recently welcomed PancakeSwap perpetual, has undoubtedly benefited from introducing the short-term incentives program. However, the price of the project’s native ARB token has lagged, seeing a mild 8% gain in the past month.
This trend may largely be attributed to the impact of new ARB tokens flowing into the open market through the incentive program. In the long term, however, the Arbitrum community will hope that the users attracted to the ecosystem will remain and positively impact the ARB price.
ARB currently trades at $1.01, a slight drop from its monthly high of around $1.2. The token has a $1.2 billion market cap, while Arbritrum ranks as the fourth largest chain by DeFi TVL, according to DeFilLama.