Arbitrum STIP: 71.4M ARB Incentive Experiment

## Background In late 2023, Arbitrum DAO launched the Short-Term Incentive Program (STIP), distributing 71.4M ARB tokens (~$100M at peak) to 56 ecosystem protocols to drive usage and growth. ## The Mechanism STIP used a grant-based approach: - Protocols applied for incentive allocations - DAO voted on applications - Recipients distributed ARB as user incentives - Metrics tracking was required but inconsistent ## Mixed Results The program showed both successes and challenges: **Positives:** - TVL increased significantly during the program - Many protocols gained new users - Created ecosystem coordination and awareness - Demonstrated DAO governance at scale **Challenges:** - Mercenary capital left after incentives ended - Some protocols used incentives inefficiently - High cost per retained user in many cases - Limited long-term user retention ## Key Metrics - **71.4M ARB distributed** to 56 protocols - **TVL peaked** during incentive period - **User retention** varied significantly by protocol - **Cost per retained user** ranged from reasonable to very high ## Learnings Applied to LTIP The STIP experience directly informed the Long-Term Incentive Pilot (LTIP): - Longer timeframes for sustainability - Better measurement frameworks - Focus on retention metrics - More structured reporting requirements