In response to increasing competition from rivals like Base and Mantle, the Layer 2 blockchain network Arbitrum has launched a $41.5 million grant program to boost its ecosystem.
A Quick Look at Arbitrum’s $41.5m Grant Program
While Arbitrum is the dominant Layer 2, competition’s starting to heat up with the likes of Base and Mantle.
Arbitrum is fighting back through an ecosystem boost.
— Edgy – The DeFi Edge 🗡️ (@thedefiedge) October 5, 2023
A total of 50 million $ARB tokens have been allotted by Arbitrum to be distributed across eligible projects with the main goal of motivating users through various project incentives. The following are the main conclusions to draw from this action.
Great Opportunities Are Produced by Arbitrum
In the beginning, DEXs and Perps Protocols will set the pace. Particularly, 17.6% of the grant candidates are Perpetual Protocols (Perps), and 11.8% are decentralized exchanges (DEXs). These Perps Protocols awards are primarily designed as refunds and trade incentives to increase trading activity.
Second, the most money has been requested for grants by well-known protocols like GMX (14 million $ARB), MUX Protocol (9 million $ARB), and GNS Network (7 million $ARB). This emphasizes the interconnectedness of these protocols with the Arbitrum ecosystem and shows their potential for immediate gain or tangentially related to the grant season.
As a result, anticipation and inflows rise. In specifically, over the past seven days, Arbitrum has seen a positive net inflow of $127.6 million. This denotes an increase in curiosity and eagerness. This surge might signal the beginning of a “Arbitrum season,” which would encourage investors to look into different ecosystem prospects.
Therefore, it is urged that investors and other members of the Arbitrum ecosystem carefully evaluate prospective outcomes that are consistent with their investment approaches. The funding is open to projects with distinctive catalysts and sizable market value, like Arbitrum Native.
In addition, PlutusDAO, although not participating in the initial round of applications, is still qualified for a 750,000 ARB award, which might aid in restoring plsARB’s peg. This amounts to about $600 at the current price, which occupies the position of being 50% below the peg at this time.
Investors should maintain a close eye on methods, protocols, and innovations within the ecosystem, including Jones Dao, Umami, and Magpie vaults, as the Layer 2 area continues to expand. It is anticipated that the competition between Layer 2 networks would encourage innovation and open up opportunities for both users and investors.