KEYTAKEAWAYS
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Arbitrum DAO launches DRIP, deploying 24M ARB to boost DeFi lending protocols as part of a $40M, year-long incentive plan.
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The DAO funds DeFi growth through treasury revenues, MEV capture, and protocol-neutral incentives, aiming for sustainable expansion in the Layer 2 ecosystem.
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DRIP introduces performance-based rewards without registration, supporting protocols like Morpho and strengthening Arbitrum’s leadership in the multi-chain DeFi landscape.
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ArbitrumDAO has officially launched Season 1 of its DeFi Revival Incentive Program (DRIP), deploying up to 24 million ARB to strengthen top lending protocols.
This program is the first phase of a $40 million campaign approved by the DAO in June. It aims to launch targeted DeFi incentives over four quarters.
Overview of Arbitrum DAO
Arbitrum DAO is a community-driven governance system. Its core is to let $ARB holders propose and vote on changes to the organization and tech stack.The DAO manages protocol upgrades, treasury allocations, and the ecosystem’s direction. $ARB is a governance token. It is used for voting and supports decisions such as initial funding and the role of delegates.
Formed in the early days of the Arbitrum ecosystem, the DAO uses Snapshot and Tally for proposals and voting. This keeps participation transparent and decentralized.In 2025, the DAO approved several major actions. These include a $1.5 million budget for 2025 DAO operations and capturing MEV revenue via Timeboost, bringing in $600,000–$1,000,000 per month.
The treasury program also generates about $137,000 per month through RWA investments, ETH staking, and DEX liquidity. These funds support incentive programs like DRIP and help Arbitrum stay ahead in the Layer 2 race.
The governance model is performance-oriented and protocol-neutral. For example, DRIP is managed by Entropy Advisors and powered by Merkl. Users do not need to register to get rewards.
This reflects the DAO’s goal: drive sustainable growth through community consensus, not short-term hype.
Arbitrum’s DeFi Ecosystem
As an Ethereum Layer 2, Arbitrum has become a key DeFi player. In 2025 its growth is strong.By the latest data, Arbitrum ranks No. 7 in TVL, at the $3B level.Low fees, high throughput, and seamless Ethereum compatibility attract many protocols and users.
Arbitrum’s DeFi growth benefits from Orbit chains such as Converge and Robinhood Chain.In August 2025 these chains brought the DAO $74,000 in license fees, with more expected.Cross-chain work with Polkadot via Bifrost and Hyperbridge brings DOT/vDOT liquidity to Arbitrum and improves multi-chain DeFi.
DRIP is a strategic investment by Arbitrum DAO. It uses performance-based incentives, such as no-registration rewards and a 3-month claim window. The goal is to revive the ecosystem and avoid the attention-economy trap of old incentives.
With more protocols like Morpho getting DAO support, Arbitrum is set to strengthen its lead in Layer 2 DeFi in 2025.Users should still note the risks behind high APY and join with care.
In short, through DRIP and other actions, Arbitrum DAO is strengthening governance and energizing DeFi. It is pushing Arbitrum toward a more mature, multi-chain future.
