- Arbitrum launches a $41.5 million grant program to bolster its Layer 2 ecosystem.
- DEXs and Perps Protocols lead grant requests foster trading incentives.
- Positive inflows indicate an approaching ‘Arbitrum season’ with growing investor interest.
As the Layer 2 blockchain network Arbitrum faces growing competition from rivals like Base and Mantle, it is responding with a $41.5 million grant program aimed at strengthening its ecosystem.
Arbitrum has allocated a total of 50 million $ARB tokens to distribute among qualifying projects, with the primary objective of incentivizing users through various project incentives. The key takeaways from this move include the following.
Arbitrum Creates Great Opportunities
Firstly DEXs and Perps Protocols will lead the way. Specifically, of the grant applicants, 17.6% represent decentralized exchanges (DEXs), while 11.8% are Perpetual Protocols (Perps). These Perps Protocols grants are primarily intended for trading incentives and rebates, offering a boost to trading activity.
Secondly, prominent protocols like GMX (14 million $ARB), MUX Protocol (9 million $ARB), and GNS Network (7 million $ARB) have made the highest grant requests. This underscores the close ties between these protocols and the Arbitrum ecosystem, indicating their potential to benefit directly or indirectly from the grant season.
In response, this increases inflows and anticipation. In particular, Arbitrum has witnessed a positive net inflow of $127.6 million over the last seven days. This indicates a surge in interest and anticipation. This influx suggests that an ‘Arbitrum season’ might be on the horizon, prompting investors to explore various opportunities within the ecosystem.
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Thus, investors and participants in the Arbitrum ecosystem are advised to carefully assess potential outcomes aligned with their investment styles. Projects eligible for the grant, such as Arbitrum Native, present unique catalysts and significant market capitalization.
In addition, PlutusDAO, though absent from the first round of applications, remains eligible for a 750,000 ARB grant, which could help re-establish the peg of plsARB. This marks almost $600 at the current price which takes the spot of being currently 50% below the peg.
As the Layer 2 space continues to evolve, investors should keep a close eye on strategies, protocols, and developments within the ecosystem, including Jones Dao, Umami, and Magpie vaults. The competition between Layer 2 networks is expected to foster innovation and create opportunities for users and investors alike.
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