The Arbitrum DAO has allocated an additional $23.4 million to back all successful grant applicants, expanding its grant program budget to support 56 projects, totaling over $70 million

Arbitrum DAO Expands Grant Budget

Following a vote by the community from Nov. 18 to Dec. 2, the proposal aimed to distribute extra funds to projects that had been approved but remained unfunded due to the Short-Term Incentive Program's (STIP) cap of 50 million ARB tokens. The recent decision, backed by 216.7 million votes in favor against 73.1 million, will distribute 21.1 million ARB tokens, equivalent to $23.4 million, to an additional 26 projects.

This additional capital has increased STIP's total budget to 71.4 million ARB tokens, supporting 56 projects to foster a diverse environment for emerging builders.

Arbitrum Network and Protocol Funding

Arbitrum functions as a layer-2 solution enhancing Ethereum's scalability for quicker and more cost-effective transactions. Governed by ARB token holders, the protocol generates revenue through transaction fees.

According to DefiLlama data, Arbitrum accrued substantial fees and revenue on Dec. 1, amassing over $180,165 in fees and $43,342 in revenue. November showcased a total fee generation of $5.93 million and revenue of $1.47 million.

Allocations and Community Debate

Notably, the increased budget encompasses allocations for Gains Network (4.5 million ARB), Wormhole (1.8 million ARB), and Stargate Finance (2 million ARB). However, PancakeSwap retracted its 2 million ARB proposal due to the Know Your Customer (KYC) requirements of the STIP.

The decision to grant additional funding wasn't devoid of controversy. Representatives from the MUX protocol opposed it, expressing concerns that this might amalgamate projects of varying quality. They advocated for selective support based on protocol fundamentals, execution strategies, and grant size.

Moreover, some Arbitrum DAO members suggested that implementing a full second round instead of a backfund would have been a fairer approach to include additional protocols in the incentives program.