Arbitrum is betting big on DeFi growth. On September 3, the Layer-2 network unveiled DRIP, a $40 million on-chain incentive program designed to boost liquidity and expand lending activity across its ecosystem.

The results came fast. On the first day, $20 million in ETH and USD assets were minted on Arbitrum. By day two, inflows had already doubled with users deploying both ETH and stablecoins across six lending protocols.

ETH Assets Take the Spotlight

The program’s core focus starts with ETH. Five ETH assets are eligible, together holding a $1.07 billion market cap

The largest is ether.fi’s weETH at $558M, followed by Lido’s wstETH at $356M. These are yield-bearing tokens, which makes them attractive collateral for borrowers. DRIP’s design encourages exactly that: borrow ETH against these assets while earning program incentives.

To balance this, Arbitrum has also allocated rewards for supplying vanilla ETH on Aave, ensuring lending markets stay liquid.

Since launch, Arbitrum has already bridged 749,000 ETH from mainnet, the highest among all L2s. That depth of liquidity provides a strong base for DRIP’s rollout.

DRIP Campaign Tracking Dashboard: ETH & USD Assets

We’re launching 2 new @Dune dashboards to monitor the growth, usage, and market share of eligible assets in DRIP.

On the first day, $20M in ETH and USD assets were minted on Arbitrum.

More details in this 🧵 pic.twitter.com/z6jJS4bq06

— Entropy Advisors (@EntropyAdvisors) September 5, 2025

Lending Protocols Step In

Before DRIP even began, nearly $800M in eligible assets had been deposited across the six participating protocols:

•  Aave
•  Morpho Labs
•  Fluid
•  Euler Finance
•  Dolomite
•  Silo Finance

Among them, ether.fi’s weETH dominates lending usage, with $497M already deposited on Aave. That level of traction shows the demand for yield-bearing ETH collateral.

DRIP is also nudging protocols to expand listings. Morpho Labs recently added GMX’s gmETH, highlighting how the program pushes projects to integrate faster and attract more users.

Stablecoin Inflows Gather Pace

On day two, the action shifted to stablecoins. Arbitrum saw $45M in inflows from USD-based assets.

🥇 syrupUSDC: $17M (37%)

🥈 USDe: $13M (28%)

🥉 RLP: $5.1M (11%)

Among all eligible assets, sUSDS, syrupUSDC, and sUSDe are proving most popular with users.

Just like with ETH, DRIP introduces USDC supply incentives to support looping strategies. Borrowers can recycle liquidity back into lending markets, increasing volumes and deepening usage.

So far, $40M in USDC has been injected into Euler, Fluid, Silo, and Morpho, all supporting DRIP’s supply-side mechanics.

Protocol Revenue: Who Leads?

Even before DRIP, Arbitrum protocols were generating steady fees. Last week alone, they booked $1.56M in revenue, down slightly at -7.69% week-over-week.

The leaderboard currently looks like this:

🥇 GMX: $512k

🥈 Ostium Labs: $231k

🥉 Gains Network: $140k

🔹 Aave: $109k

🔹 Uniswap: $91k

With DRIP live, the rankings could shift. More liquidity and lending activity may boost protocols like Aave, Fluid, and Silo, which now carry USDC incentives.

Last week, @arbitrum protocols generated $1.56M in revenue (-7.69% WoW).

With DRIP now live, will we see a change in protocols leading the revenue leaderboard on Arbitrum?

🥇 @GMX_IO: $512k
🥈 @OstiumLabs: $231k
🥉 @GainsNetwork_io: $140k
🔹 @aave: $109k
🔹 @Uniswap: $91k pic.twitter.com/LNfnuxpddp

— Entropy Advisors (@EntropyAdvisors) September 5, 2025

Arbitrum’s strategy is clear. By targeting yield-bearing ETH and stablecoins, DRIP lowers barriers for both lenders and borrowers. Incentives make it cheaper to borrow, while liquidity rewards keep markets balanced.

This dual-sided approach could accelerate adoption across Arbitrum’s ecosystem. More protocols listing new assets, more users deploying capital, and more sticky liquidity flowing into Layer-2.

The network already holds the crown for ETH bridging. With DRIP, Arbitrum is positioning itself to dominate the next wave of DeFi adoption.

Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.

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