Arbitrum (ARB) Tokenomika

The Arbitrum (ARB) token is an ERC-20 equivalent token launched on Arbitrum One on March 16, 2023, with a total initial supply of 10.00 billion tokens. The tokenomics are fundamentally designed to support a decentralized governance model through the Arbitrum DAO, which controls the ecosystem's future and treasury.

Issuance Mechanism

The ARB token launched with a fixed initial supply of 10.00 billion tokens. While the initial supply is fixed, the tokenomics include a mechanism for potential future inflation:

• Inflation Cap: The token has a maximum inflation rate of 2% per annum. This inflation mechanism is controlled by the Arbitrum DAO, which has the power to manage the token's supply and future issuance.
• Mint Functionality: The ARB token contract is an upgradeable proxy contract that contains a "Mint" superuser function. This function allows for the creation of new tokens, which is a key component of the DAO's ability to manage the supply, including the potential 2% annual inflation.

Allocation Mechanism

The total supply of ARB tokens is distributed across various stakeholders, with the largest portion allocated to the Arbitrum DAO Treasury. The allocation breakdown is as follows:

• Arbitrum DAO Treasury: This is the largest allocation, providing the DAO with significant resources to fund ecosystem growth, manage the protocol's technical future, and control sequencer profits.
• User Airdrop: Approximately 1.16 billion ARB (11.62% of the total supply) were airdropped to eligible wallet addresses on March 23, 2023, based on actions taken before February 6, 2023.
• Arbitrum Foundation: The Foundation received 750 million ARB (7.5% of the total supply), with 50 million ARB immediately available and the remaining 700 million ARB subject to a four-year linear vesting schedule.

Usage and Incentive Mechanism

The primary utility of the ARB token is governance, but it is also used extensively for ecosystem incentives.

Governance

ARB serves as the governance token for the Arbitrum DAO, which governs the Arbitrum ecosystem, including Arbitrum One and Arbitrum Nova. Tokenholders can participate in both off-chain governance via Snapshot and on-chain governance via Tally. The DAO has control over critical aspects of the network, including:

• Enacting changes to Arbitrum One and Arbitrum Nova smart contracts.
• Allocating treasury funds.
• Amending the Arbitrum DAO Constitution.
• Authorizing new Orbit Chains.

Tokenholders can also delegate their voting power to another address.

Incentives and Ecosystem Funding

ARB tokens are used to incentivize ecosystem participants through various programs funded by the DAO Treasury:

• Short-Term Incentive Program (STIP): Allocated 50 million ARB (0.50% of total supply) to 30 ecosystem protocols, with an additional 21.52 million ARB allocated via the STIP Backfund.
• Long-Term Incentives Pilot Program (LTIP): Allocated up to 45 million ARB (0.45% of total supply) to protocols that were recipients of STIP or the STIP Backfund.
• Gaming Catalyst Program (GCP): Approved in June 2024, this program allocated up to 225 million ARB (2.25% of total supply) to gaming projects over a three-year period, broken down into Build Grants, Investments, and Infrastructure Bounties.
• Strategic Partnerships: In September 2024, the Arbitrum Foundation was approved to receive 250 million ARB (2.50% of total supply) to bolster its Strategic Partnerships Budget.

Non-Incentive Mechanisms

• No Direct Rewards for Holders: As of December 2024, there are no active incentive programs where users or tokenholders earn fees, additional tokens, or compensation simply by holding or interacting with the network.
• Not the Gas Token: ARB is not the gas token for Arbitrum One; transactions on Arbitrum One use ETH for gas fees.
• Dispute Resolution (BoLD): While the new BoLD dispute protocol supports using any ERC-20 token for challenge bonds, Arbitrum One currently uses ETH for this purpose due to its greater liquidity and the fact that fraud proofs are submitted and arbitrated on L1 Ethereum.

Locking Mechanism and Unlocking Time

The majority of the ARB token supply allocated to the team, advisors, and investors is subject to a multi-year vesting schedule designed to ensure long-term alignment.

• Vesting Schedule: The tokens allocated to Offchain Labs Team & Advisors and Offchain Labs Investors are subject to a four-year lockup period.
• Cliff and Vesting Start: The first major unlock (the cliff) occurred one year after the token launch (March 23, 2023).
• Vesting Duration: Following the one-year cliff, the remaining tokens vest linearly on a monthly basis for the subsequent three years.
• Full Vesting: The ARB token supply is scheduled to be fully vested by March 2027, with approximately 1.1% of the total supply vesting monthly during the linear release period.

Upcoming Unlock Events

The following table details the next ten scheduled daily unlock events for the ARB token, starting from today, November 27, 2025:

These daily unlocks represent a consistent, small increase in the circulating supply, reflecting the linear monthly vesting schedule for the locked allocations. For example, a monthly unlock event, such as the one scheduled for July 2025, involves a total release of approximately 108.56 million ARB tokens distributed primarily among Offchain Labs Team & Advisors, Offchain Labs Investors, and the Arbitrum Foundation.