Arbitrum launches USDG growth program and ARB proposal

Paxos launched its USDG stablecoin natively on the Arbitrum One network as part of the Global Dollar Network. The stablecoin, which is backed 1:1 by US dollar cash and equivalents, is designed to function as a core settlement and liquidity asset within the Arbitrum DeFi ecosystem. Initial integrations included protocols such as Fluid, Morpho, GMX, and Maple, with exchange support from Kraken and cross-chain transfers via Stargate. Following the launch, the Arbitrum network experienced a surge in stablecoin market capitalization, increasing by $127 million within a 24-hour period. To further drive adoption and liquidity, a proposal was submitted to the ArbitrumDAO to include USDG growth as a strategic objective, which could involve an incentive program of 100 million ARB tokens and the deployment of treasury assets. Arbitrum has since launched a ‘Stablecoin Growth Program’ to increase USDG liquidity and utility. This program features a reward pool of 2 million ARB, where the first 10 approved projects to maintain a 30-day average Total Value Locked (TVL) of $10 million in USDG will each receive 200,000 ARB. Concurrently, a governance ‘Temperature Check’ vote is underway regarding a proposal to allocate an additional 100 million ARB from the DAO treasury to support USDG expansion. This proposal includes increasing incentives through the DeFi program DRIP and authorizing the Arbitrum Treasury Management Committee (ATMC) to convert net fee revenue from the Arbitrum Expansion Program (AEP) into USDG. While USDG market capitalization reached approximately $31.2 million following its October 6 native issuance, it currently represents less than 1% of the total stablecoin volume on the network. In addition to stablecoin initiatives, the Arbitrum DAO is considering a constitutional improvement proposal to establish an L1 Voting Recovery System.