Journalist
Posted:
- The Arbitrum Protocol witnessed growth as the ecosystem flourished.
- GMX led the way in growth on the network.
As the crypto market picked up speed, Arbitrum[ARB] saw growth in several areas.
After the excitement of the ARB airdrop in March, the ecosystem became quiet. DeFi-focused Arbitrum faced challenges over the summer when many protocols struggled to generate fees due to low volume.
But with the recent surge in NFTs and increased trading activity, the Arbitrum ecosystem rebounded thanks to new token rewards.
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Now that 50 million ARB tokens have been distributed and the Short Term Incentive Program is fully underway, it’s no surprise that we’re seeing broad outperformance across the Arbitrum ecosystem: pic.twitter.com/S49FnTrc2k
— parsec (@parsec_finance) November 10, 2023
To encourage usage and growth, they introduced a ‘Short Term Incentive Program’ (STIP) in September. This program offered 50 million ARB tokens for various protocols.
The question of perpetuals
The Perpetuals sector received the most subsidy tokens, around 43%. This increase in tokens positively impacted recipients’ products, directly driving their usage.
ARB itself responded positively. An increase in supply may have worried people before, but it is now being seen as a positive sign of the broader market recovery.
GMX, the largest Arbitrum protocol and the largest recipient of subsidies, received 12 million tokens. Although GMX’s v2 product got off to a slow start, they focused their entire ARB subsidy on encouraging v2 liquidity providers.
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GMX, the largest subsidy beneficiary with 24% of the entire subsidy pool, has chosen to focus the entire subsidy on incentivizing V2 liquidity providers.
As a result, we’ve seen significant flows into v2 LPs: pic.twitter.com/7adsDKb6JT
— parsec (@parsec_finance) November 10, 2023
This approach worked well and almost doubled total liquidity in v2. This would also result in greater trading volume, which would lead to higher fees.
Realistic or not, here is ARB’s market cap in BTC terms
The network’s revival is good news. More users and liquidity are positive signs. It shows that the network is becoming more active and attractive.
However, only time will tell whether this trend will continue after the end of the stimulus measures. At the time of writing, ARB was trading at $1.141482. The price has fallen by 2.1% in the last 24 hours. However, trading volume remained high.
Source: Santiment
