Arbitrum Launches DRIP: 80 Million ARB in DeFi Incentives

The DeFi Renaissance Incentive Program (DRIP) is Arbitrum’s proposal to strengthen its decentralized financial ecosystem. Designed by Entropy Advisors and managed through Merkl, this program aims to break away from traditional incentive models in DeFi: instead of rewarding vanity metrics, it seeks to foster concrete actions that generate liquidity and real growth.

Season One: “Loop Smarter on Arbitrum”

The first season began on September 3, 2025 and will run until January 20, 2026, lasting 20 weeks organized into 10 two-week epochs. The budget allocated is up to 24 million ARB.

Its goal is to incentivize the use of leverage looping strategies in Arbitrum One lending markets. The mechanism consists of:

1. Depositing a collateral asset.
2. Borrowing against it.
3. Reinvesting the borrowed funds into more collateral.
4. Repeating the cycle multiple times.

The greater the volume and consistency of looping during each epoch, the higher the ARB rewards.

Additionally, in some selected markets, users will also be rewarded directly for supplying ETH (WETH) or USDC, opening more opportunities for participation.

Eligible Assets and Markets

The program is protocol-agnostic, distributing rewards across multiple markets and assets to foster liquidity throughout the Arbitrum ecosystem.

• ETH-type collateral: weETH, wstETH, rsETH, ezETH, gmETH.
• Stablecoin collateral: sUSDC, sUSDS, USDe, sUSDe, syrupUSDC, RLP, wstUSR, sUSDai, thBILL.
• Pendle derivatives (PT/YT): all based on the eligible assets are also included.

A Phased Rollout

The season unfolds in two stages:

• Discovery phase (epochs 1 and 2): allocates 15% of the total budget. It serves to establish baselines and reference parameters.
• Performance phase (subsequent epochs): concentrates most of the incentives. Markets with the best performance receive higher rewards, stimulating competition and efficient capital allocation.

How to Participate in DRIP

No prior registration is required: you only need a wallet and to perform DeFi activities on Arbitrum One with the eligible assets.

Main steps:

1. Bridge funds to Arbitrum One using a compatible bridge.
2. Choose a market from the official platform arbitrumdrip.com.
3. Deposit an eligible collateral into your preferred protocol.
4. Execute loops by borrowing ETH or USDC and reinvesting them.
5. Be aware of liquidation risks in case of price or rate changes.
6. Claim rewards at the end of each epoch via Merkl (available until April 20, 2026).

The evolution of each market will influence future incentive distribution: the most active ones will receive a higher allocation in subsequent epochs.

Governance and Transparency

The DRIP program was approved by the community through ArbitrumDAO and is managed by Entropy Advisors, with oversight from the Arbitrum Foundation and a review committee.

Metrics and periodic reports will be published, allowing the community to monitor results and decide on the program’s continuation or adjustments.

Risks and Considerations

• Leverage looping carries liquidation risk under adverse scenarios.
• ARB rewards do not cover potential losses.
• Program parameters may change by governance decision.
• The program does not constitute financial advice and does not guarantee returns.

The DRIP Program represents a community-driven, structured effort to foster sustainable growth in Arbitrum’s DeFi ecosystem.

The initiative contemplates a total allocation of 80 million ARB (around $40 million), distributed across four seasons. Each one will focus on a specific DeFi sector, allowing results to be measured and strategies adjusted according to effectiveness.