Arbitrum’s ARB token has risen about 16% since the Arbitrum Foundation announced a new incentive program for stablecoins on Thursday.
ARB led a rebound in decentralised finance tokens on Monday, climbing about 7% to around $0.20.
What the program offers
The Stablecoin Growth Program sets aside 2 million ARB in rewards. The first 10 teams to reach $10 million in total value locked in USDG, a stablecoin issued by Paxos, can qualify.
Apps holding at least $1 million in stablecoin balances can also apply for performance-based incentives and wider ecosystem support.
At around $0.195 per token, the 2 million ARB reward pool is worth about $390,000.
Why USDG
USDG is natively issued on Arbitrum One. It is already integrated with DeFi apps on the network including Fluid, Morpho, GMX and Maple.
Across all networks, USDG has about $3.09 billion in circulation, making it the seventh-largest stablecoin by market value, according to DefiLlama. Most of that supply sits on other networks, including X Layer, Robinhood Chain and Solana.
As a partner in the Global Dollar Network behind USDG, Arbitrum shares in rewards generated by USDG activity on its network.
A bigger push may follow
A separate ArbitrumDAO proposal would go further. It would make USDG growth a strategic objective for the network, add 100 million ARB to an incentive program, and use Arbitrum treasury assets to support USDG liquidity.
That proposal had not been approved at the time of writing.
The Arbitrum Foundation says about $4 billion in stablecoins are currently held on Arbitrum.
What happens next
The key test is whether teams actually build up USDG balances on Arbitrum, and whether the DAO approves the larger 100 million ARB proposal. Without either, the price move rests on expectations rather than new stablecoin activity.
