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Key Takeaways

• Arbitrum TVL grew by 27% within 4 weeks of conclusion of voting on STIP.
• The daily new addresses making their first transaction also grew by 27% in the same period.
• Most protocols saw growth in their TVL, with Silo Finance seeing unto 50X multiple on the growth in TVL per dollar allocated by STIP.

The Arbitrum STIP is a one-time initiative to distribute 50 million ARB tokens to support active Arbitrum protocols based on community voting. 29 protocols received funding after 1st round of voting, with GMX receiving the most amount of ARB tokens. Later, on December 2nd, the community voted to extend the STIP budget to 71.4 million ARB tokens and 56 projects. For more details, refer to Arbitrum STIP.

Impact on the Ecosystem

The voting on the distribution of the STIP concluded on October 12th. Since then, the TVL of Arbitrum has grown by as much as 55.4%, likely in anticipation of higher yields.

TVL growth of top protocols since STIP began, Source: IntotheBlock

The majority of the protocols that have started distributing incentives have seen growth in their TVL in the weeks following the STIP regardless of the amount of ARB tokens they received. Silo Finance protocol is one of the biggest winners as they had the highest TVL gain (40M USD), even with very few ARB tokens being allocated. The protocol had a 50X multiple on the TVL growth per dollar allocated within 4 weeks following the STIP.

Another metric to look at is the number of users on Arbitrum. The number of new users making their first transaction in Arbitrum often spiked on dates when the large protocols initiated distributed incentives. The cumulative sum of the daily average users of all the grantees increased by 38% post-incentives compared to pre-incentives.

The STIP, apart from the network, also positively impacted the ARB token price. ARB token’s value crossed the $1 mark in this period. Before STIP, tokens operating under the Arbitrum protocol were illiquid as they were starved of swap and activity. However, since the STIP announcement, there has been more liquidity in the Arbitrum ecosystem, which has resulted in an increase in the price of the ARB token.

Between September 15 (pre-STIP) and January 15 (12 weeks post-STIP approval), the price of ARB rose by 156.5%. In the same period, the price of OP (Optimism) rose by 152.6%, and the price of MATIC (Polygon) rose by 61.3%, while the total market cap of cryptocurrencies increased by 58.9%. This shows that the STIP has marginally impacted the ARB token price, evident in its slightly higher growth compared to the other L2s.

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