- Arbitrum protocol witnessed growth as ecosystem flourishes.
- GMX was at the forefront of growth on the network.
As the crypto market picked up speed, Arbitrum[ARB] saw growth in various areas.
After the excitement of the ARB airdrop in March, the ecosystem went quiet. Arbitrum, focused on DeFi, faced challenges in 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 was bouncing back, thanks to new token rewards.
To boost usage and growth, they introduced a 'Short Term Incentive Program' (STIP) in September. This program offered 50 million ARB tokens to various protocols.
The matter of the perpetuals
The Perpetuals sector received the most grant tokens, about 43%. This boost in tokens positively impacted the products of recipients, directly boosting their usage.
ARB itself was responding positively. An increase in supply might have worried people earlier, but now it's seen as a positive sign in the broader market recovery.
GMX, the biggest Arbitrum protocol and the largest grant recipient, received 12 million tokens. Even though GMX's v2 product had a slow start, they directed their entire ARB grant to encourage v2 liquidity providers.
This approach worked well, nearly doubling total liquidity in v2. This would also result in more trading volume, leading to higher fee collections.
Realistic or not, here's ARB's market cap in BTC terms
The revival of the network 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 if this trend continues after the incentives end. At press time, ARB was trading at $1.141482. Its price has fallen by 2.1% in the last 24 hours. The volume at which it was trading, however, remained high.
Source: Santiment
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