Arbitrum Unveils $40M DeFi Incentive to Dominate L2 Ecosystem

TLDR

• Arbitrum has launched a forty million dollar DeFi incentive program called DRIP to strengthen its position in Ethereum scaling.
• The program will distribute up to eighty million ARB tokens across four seasons focusing on different DeFi sectors.
• The first season will run from September 3, 2025 to January 20, 2026 and will prioritize lending market leverage.
• Users can earn rewards by borrowing against assets such as wstETH, eUSDC and USDe on approved platforms including Aave and Morpho.
• Arbitrum secures more than nineteen billion dollars in value which places it ahead of rivals such as Base and OP Mainnet.

Arbitrum has launched a $40 million DeFi incentive program to attract liquidity and strengthen its position in Ethereum’s scaling ecosystem. The initiative, called the DeFi Renaissance Incentive Program (DRIP), will allocate rewards for targeted on-chain actions. The program starts with a focus on lending market leverage and includes participation across multiple platforms.

Arbitrum Unveils DRIP To Boost DeFi Growth

Arbitrum announced DRIP on September 3, outlining its plan to distribute up to 80 million ARB tokens in incentives. Entropy structured the program, while Merkl powers it, and Entropy Advisors will oversee execution under ArbitrumDAO. The program spans four seasons, each designed to boost different segments of decentralized finance.

The first season runs from September 3, 2025, through January 20, 2026, with lending leverage as its central focus. Users can borrow against yield-bearing ETH and stablecoin assets on approved protocols and earn rewards. Arbitrum said up to 24 million ARB tokens will be distributed during this phase.

The performance-based design ensures rewards are spread across protocols rather than concentrating liquidity in one venue. Supported platforms include Aave, Morpho, Fluid, Euler, Dolomite, and Silo. Eligible collateral includes wstETH, eUSDC, and USDe, expanding options for participants.

DRIP Program Supports Arbitrum’s Market Leadership

Competition within the Ethereum layer-2 ecosystem is increasing, with networks racing to attract users, developers, and liquidity. Data from GrowthePie shows nearly 13% of Ethereum’s application revenue now originates on scaling solutions. Arbitrum holds a leading position in this environment, supported by its scale and liquidity depth.

According to L2beat, Arbitrum secures more than $19.1 billion in value, outpacing rivals such as Base and OP Mainnet. Coinbase’s Base currently holds $14.7 billion, while OP Mainnet manages $3.6 billion. These figures highlight Arbitrum’s dominance but also underscore the rapid growth of competitors.

Arbitrum’s DRIP program therefore signals a strategic move to retain its lead while rewarding active DeFi users. By prioritizing borrowing demand and liquidity use, the program aims to balance growth across several protocols. The approach contrasts with single-platform rewards that often distort market incentives.

Ethereum Foundation and Interoperability

The Ethereum Foundation is also working to improve the ecosystem’s cohesion. On August 29, it introduced the Ethereum Interoperability Layer (EIL). This trustless framework will allow seamless transactions across multiple layer-2 networks.

The Foundation said EIL ensures the user experience reflects “one Ethereum” while retaining decentralization and censorship resistance. The framework supports privacy and open-source development as guiding principles. This move comes as fragmentation across Ethereum scaling networks creates user and developer challenges.

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