The ninth monthly report is live in our website!
TLDR:
- referencing period: 18th November 2025 - 1st January 2026
- 954 proposals in total, of which 128 were approved and 32 were completed
- During this period we received over 140 new application, more than 14% of our total submissions, indicating increased grantee activity.
- This report marks the third quarter of the program and is accompanied by a public DAO call to review results so far.
- Specific updates about the activity during DevConnect can be found in the “Community, Education and Event” Domain summary
Gaming Domain Summary
Over the past three months, the Gaming Domain has made good progress in funding both small and large-scale user acquisition campaigns for Arbitrum games. Seven applications were funded, with a total allocation of $133,000.
Across the seven applications there was a focus on live event content at the YGG Play summit, as well as gaming guild support for content creation and tournaments through AGDAO, P2ECREW, and Wayfinders. These campaigns are still in process but are on track to generate millions of views and tens of thousands of clicks to steam wishlists or game downloads, with a specific focus on Wildcard, a standout hit on Arbitrum with funding from AGV.
Additionally, we funded a social media campaign for Forkast, a prediction market with a focus on Esports and Gaming that is making waves in the space. This campaign, for a spend of $25,000, generated 1,028 new wallets created and signed up on the Forkast platform. This shows that there is a space for this domain to fund marketing budgets for other consumer applications that may not be strictly videogames and should be considered as a viable opportunity for future seasons of the D.A.O. program.
Headed into the final two months of the program, we are aiming to set up solid, long-term campaigns with marketing agencies, creators, and gaming guilds to ensure a baseline level of user acquisition support for Arbitrum games in the interim between Season 3 and an eventual Season 4.
Dev Tooling Summary
Within the Arbitrum DAO Developer Tooling Program, we’ve now committed a little over a third of the total budget. Over the last quarter, most of the work has been less about spraying grants and more about tightening the funnel, funding tooling that actually gets used, and pushing proposals that sit at the intersection of AI, payments, and real developer demand. A lot of time has gone into shaping proposals so they’re not just technically interesting, but meaningfully composable with the rest of the Arbitrum stack.
A big inflection point for this thinking came during Devconnect Argentina. We spent a lot of time on the ground talking to accepted grantees, teams currently in review, and folks from both the Arbitrum Foundation and the OCL. Across all of those conversations, a very consistent signal emerged: the ecosystem’s near-term focus is converging around two things, AI and Stylus. That alignment didn’t feel forced or top-down, it came up organically from builders and reviewers alike.
This makes a lot of sense when you look at where Stylus is today. The framework is no longer in a purely foundational phase. The core architecture is there, and what it needs now is refinement, better developer experience, and tooling that helps teams ship faster without friction. In that context, AI-driven tooling feels like a natural next step rather than a distraction. Whether it’s around auditing, code generation, developer assistance, or analysis, AI fits cleanly into the current maturity stage of Stylus as an enhancement layer, not a speculative bet.
On the tooling side, a large chunk of what we’re currently pushing forward is Stylus-focused. This includes proposals around privacy primitives, CLI tooling, and lower-level developer kits, as well as more practical integrations like bringing Stylus into existing workflows via Hardhat plugins. The goal here is straightforward: reduce the cost of building on Arbitrum. Less friction, fewer sharp edges, and clearer paths from idea to production for teams that already want to be here.
Looking ahead, one of the next concrete steps for the program is kicking off the AI Auditor Pilot. The plan is to deploy somewhere between $100K and $125K to run a demand-driven experiment, informed directly by delegate feedback, to see which AI auditing teams actually have a product that works and a commercial model that makes sense. This is not a blanket bet on “AI auditors” as a category. These teams often operate in different verticals, target different layers of the stack, and in practice don’t meaningfully overlap. Funding will reflect that reality rather than being evenly split just to check a box.
In parallel, we want to put a much stronger emphasis on payments. Payments were a huge topic at Devcon and continue to show up as a real priority across the ecosystem, with teams like Peanut explicitly choosing Arbitrum as a core rail. Payments matter because they’re sticky, they force abstraction, and they stress infrastructure in ways that DeFi alone often doesn’t. If we fund the right tooling for B2B payments and focus on enabling consistent month-over-month growth, we think Arbitrum can get faster feedback loops and more tangible outcomes.
Zooming out, this also ties directly into the broader stablecoin and payments race playing out across ecosystems like Polygon, Base, and Celo, all of which have built strong distribution in markets where crypto isn’t just speculative, but operational. These are regions where crypto acts as a lifeline or a settlement layer, not a toy. Our view is that by leaning into payments and the tooling that supports them, while doubling down on AI and Stylus at the right moment, Arbitrum can position itself as infrastructure for real economic activity, not just another scaling solution.
Orbit Domain Summary
Orbit domain highlights include Dual Mint which has reached its first milestone with vaults launched on Arbitrum and 50k in TVL, against a final target of $15m. Locale.Network has reached its fifth milestone and is now able to onboard financial and IoT data in a privacy preserving way, with an SDK usable by third parties and a pilot currently being finalized with a US municipality.
A key learning from these efforts is that milestones should both validate product market fit early and compose with other protocols.
Looking ahead, approval is upcoming for North Investments, which is launching a permissioned Orbit chain to tokenize yield generating assets with a target of 3m TVL.
In parallel, the Blaze Liquidity Program was proposed to the DAO in response to recurring liquidty needs from RWA builders, with the goal of generating diversified yield for the DAO while supporting early-stage projects.
Community, Education and Event Domain Summary
During this period, the Education Domain focused heavily on supporting high-impact activations during DevConnect in Buenos Aires. The strategy was to ensure Arbitrum had a presence in diverse verticals: from institutional onboarding to developer education and community networking.
Participating in DevConnect allowed us to shift focus from proposal review to direct engagement with our ecosystem. We met with diverse grantees, spanning beyond just the DevConnect-specific activations, to discuss how the DAO can further support their growth and to gather feedback on the program. It was particularly encouraging to see firsthand the successful onboarding of new users in Latin America and Africa driven directly by these grants.
A standout success for the domain was the ETH House. Funding this initiative provided a critical physical hub for builders, the community, and the DAO to converge, proving that having a dedicated ‘home base’ at major conferences significantly amplifies collaboration. These in-person interactions confirmed that our funding strategies are effectively translating into tangible community growth.
The following is a comprehensive list of events funded during DevConnect.
- Arbitrum Bridge Latam
- Grant: $40,483
- Description: An institutional activation designed to connect the Arbitrum ecosystem (Foundation, Offchain Labs) with traditional financial entities (banks, fintechs) and policymakers in Latin America. The event focused on discussing the integration of blockchain solutions into the region’s financial infrastructure.
- Urbe Campus: DevConnect Edition
- Grant: $14,600 USD
- Description: A 4-day educational hacker house (Nov 12-15) that hosted 50 selected scholars. The curriculum focused on Stylus, Orbit chains, and governance. The initiative resulted in 11 final project pitches, with scholars forming teams that went on to win bounties in the main DevConnect hackathon.
- Arbitrum Stylus Awakening: Builder Lunch
- Grant: $14,000 USD
- Description: A targeted “Builder Lunch” designed to engage technical talent specifically around Arbitrum Stylus. The event provided a space for developers to discuss writing smart contracts in languages like Rust and C++, fostering a deeper technical understanding of Arbitrum’s capabilities.
- Official Sponsor of “ETH HOUSE”
- Grant: $15,000 USD
- Description: The DAO secured official sponsorship of the ETH House. This included a dedicated “Arbitrum Day” (Nov 15) focused on educational workshops for Stylus and network use cases, ensuring high visibility among the core Ethereum developer community residing in the house.
- Dev3pack DeFi Builder’s Club
- Grant: $12,500
- Description: A networking event tailored specifically for DeFi builders. The goal was to create a dedicated environment for DeFi protocols and developers to connect, share architectural ideas, and foster collaboration within the Arbitrum DeFi ecosystem.
New Protocols and Ideas Domain Summary
From October 1st to December 31st, the distribution of applicant interest across verticals followed a pattern similar to previous months. One interesting shift compared to the overall period was that the broader “Others” category (11.9%) slightly surpassed AI (10.4%). Meanwhile, DeFi (35.1%) and Consumer Apps (22.4%) continued to be the most popular verticals.
During this timeframe, we reviewed 133 proposals, a higher-than-average volume. Of these, 10 were approved, with 6 originating from Castle Labs’ BD efforts. In addition, 28 proposals remain pending, awaiting resubmission or additional information. Of the remaining 105 rejections, 20 were declined due to a lack of response to follow-up questions or because applicants were asked to resubmit under a different domain.
Finally, it is worth noting that when including submissions under review prior to October 1st, there were 13 approvals during this period, bringing the total number of NPAI domain approvals to 23 as of December 31st.
Addendum - Report on the BD activity of Castle for the Quarter
TL;DR
- Outreach → approvals: Contacted 26 teams; 11 submitted (42%), 6 approved (23% of approached), 5 pending (19%).
- ETHGlobal scan: ~200 finalists screened (AI-assisted). Yield to qualified submissions was low without warm paths.
- Hackathon reality: Many hacks are bounty-mode; repos go cold post-event and contacts are hard to source from showcase pages.
- BD moved the needle: Warm intros + template-guided milestone rewrites produced the highest submit and approval rates.
- Effort vs. payoff: Focused BD increased hours per opportunity, but cut diligence time (known teams, social proof) and raised approval density.
- Target profile: Slightly established teams with shipped product/PMF expanding to Arbitrum, plus proven builders with credible new lines.
Recommendation
Network leverage: BD effectiveness correlates with network strength. One potential idea could be to have a DAO “warm-intro lane” in the delegates’ Telegram to route vouched teams directly to Domain Allocators.
Activity
Submission and Approval rate
Of the 26 teams we engaged with more closely, 11 (42%) went on to submit a grant application, while 15 were filtered out during the screening stage. These early rejections were typically due to misalignment with Arbitrum’s goals, submission under an incorrect domain, or not meeting the required criteria.
Six teams were approved so far (23%); Exchequer, Liqvid, Paros, Bond.Credit, Emerge, and Nuvolari. Moreover, rhere are still 5 pending secondary review (19%) with a high likelihood of approval.
Resurfaced application
We also revisited past applications that demonstrated potential but were previously rejected due to factors such as timing, scope, or readiness. There were two that stood out, Precog and Nebula.
Nebula paused their development due to lack of demand and funding. Precog is still building and is finding some initial traction, which is why we reached out again to see if the application can be optimized and where we can help out to improve the overall application and product, and we currently are in the later stage of assessment with the team.
What worked
We believe the higher approval rate is largely due to sourcing projects from teams we knew through our network, which gave them additional credibility. These teams also had strong expertise in their focus area or previous experience shipping products with users. Warm introductions, avoiding AI-generated anonymous submissions, and existing social proof significantly reduced the time needed for due diligence.
Another factor contributing to the stronger submissions is the guidance these teams received compared to blind applications. Before submitting their application, we go over their idea, discuss potential issues for their protocol and ways to address them, and provide guidance on how to properly fill in the application template.
What didn’t work
We were initially very interested in hackathons as a way to discover innovative projects. However, while hackathons have numerous teams working on proof of concepts, only a very small fraction actually follow through on their ideas.
We noticed that most hackathon teams are there for the even itself or are just doing it as a small side project, with little intention to pursue their hacks. This was evident from examining team code repositories, where activity typically stopped once the hackathon ended.
Additionally, the ethglobal.com showcase page made it extremely difficult to reach out to the teams, as it didn’t provide any contact information. To connect with teams, we had to dig into GitHub, visit developer pages, and hope to find some sort of way to get in touch.
Builder sentiment
From a builder’s perspective, the teams really valued having a dedicated contact instead of just submitting a blind application. It helped them iterate faster and get clear feedback on milestones, KPIs, and what looked good versus what didn’t, which saved time for both sides.
Interestingly, although not in line with this domain, one clear pain point for many builders was the lack of co-marketing support from Arbitrum’s own channels.
Conclusions
From a subjective DA perspective, the BD effort clearly helped improve the overall quality of proposals. In particular, it led to better clarity around team composition and experience, which increased trust thanks to network effect. It therefore reduced the time needed for a more formal due diligence and resulted in stronger applications overall, considering factors like the absence of AI use in applications, but also the greater crypto experience on average of the founders, and the more practical ideas, along with more structured plans, instead of more theoretical concepts and without deep explanations, as we often see in proposals.
Moreover, many teams came in with some prior guidance and context, thanks to a few direct questions about what we were looking for, which made the review process smoother. This allowed us to focus on more practical issues, such as setting milestones and KPIs that could be truly impactful for Arbitrum, rather than spending time on other equally important but slightly less pragmatic rubrics for the development of the ecosystem.
In practice, we engaged on average with founders who were better prepared, more experienced, and supported by clearer and more solid plans, leading to higher submissions quality. Being able to evaluate more pragmatic proposals, where the program’s objectives were easier to visualize, made a clear difference compared to the slower process of assessing ideas that were often overly theoretical and lacked a practical execution path.
For these reasons, we believe the program worked well. That said, it is still early to draw firm conclusions, since each project’s KPIs will only be assessed over the next few months. The same applies to assessing the program’s broader impact on Arbitrum.
It is also worth noting some potential downsides. The BD effort may not work indefinitely, as the number of projects actively looking to build on Arbitrum is not infinite, even if it is hard to measure this in practice. Indeed, we just cannot know how much our network will continue to grow, and whether there will be fluctuations in the willingness to build new things. Therefore, we want to remain conservative, although this good start, as we don’t have long-term data to base our analysis on.
Looking a bit deeper, scalability is an important question. The BD program could potentially scale, but it would likely need some refinement and additional sourcing methods. Castle Labs’ network helped surface a solid number of projects with clear plans to contribute to Arbitrum, but relying on a single sourcing channel over a long period of time may not deliver the same results at larger scale. To complement this, other initiatives could be introduced and managed by the DAs, such as a shared channel where delegators can suggest founders or projects to reach out to, or an incubation program where the focus is shifted to quality rather than quantity.
This does not mean the BD effort cannot scale, or that the current program is not focused on quality, only that it would benefit from being combined with other approaches to make it more resilient during slower market periods and more sustainable over time.
List of approved projects in the sprint for the NPAI Domain
Alloc8 is a wallet-native autopilot that turns idle tokens into always-earning capital, bringing self-driving intelligence for DeFi yield.
The team has shown the ability to apply AI in innovative ways, while also showing strong alignment with Arbitrum’s strategic goals and maintaining close ties with the Foundation.
Sourced through BD work, Nuvolari is a multi-agent recommendation engine that learns from 80+ on-chain behavioral features to surface personalized one-click insights for portfolio rebalancing, yield farming, LP management.
The project fits well within Arbitrum’s DeFi and AI ecosystem goals. Its focus positions it as a meaningful layer for user-centric automation. The product is designed to be multichain but maintains a clear commitment to building and optimizing for Arbitrum first.
Arbitrum Accounts is a seamless portal that transforms web3 into an experience as easy and intuitive as the best of web2.
We approved Arbitrum Accounts as a focused pilot to test whether a curated, AA-based onboarding portal can drive verifiable, first-time user activity and safer discovery across Arbitrum.
Reviewed through BD work, Emerge democratizes AI content creation by enabling users to generate, monetize, and share AI-powered content (images, videos, memes) directly within social feeds through modular workflows and on-chain microtransactions.
The project’s strength is execution and distribution rather than pure protocol novelty. We approved Emerge as a pilot to test whether in-feed AI content generation and NFT deployment can drive verifiable, creator-led on-chain activity on Arbitrum One.
Otmo is a decentralised prop-trading protocol fully built on Arbitrum that allocates capital to proven traders through fully automated smart contracts, by integrating GMX and Ostium as core execution venues.
The project presents a business model that has recently gained strong interest within crypto. What differentiates this team is the emphasis on transparency, an approach that stands out compared to competitors.
Nodes Garden is a subscription-based infrastructure platform that simplifies node deployment and management. Their next step was to go fully on-chain on Arbitrum, where each node subscription would be represented by a tradable NFT. This grant is founding that.
This was decided primarily due to the team’s experience, the traction already demonstrated, and the clear goals set for future expansion.
Stimpak Duels is a Player-versus-Player (PvP) trading event app which currently offers two game modes, with more in the works: Head-to-Head and Deathmatch. It builds on top of existing Arbitrum-native infrastructure (GMX), and is showing initial traction with recurring users.
After initially rejecting the proposal a few months ago, we observed that the team maintained consistent progress, continued developing the platform, and secured new traction.
Sourced thorugh BD work, Paros is an automated and bespoke treasury layer that connects directly to self-custodied wallets and executes on-chain yield and staking strategies 24/7. Conceptually, the project is innovative in bringing together self-custody, automation, and cross-protocol coordination in a way that is not yet widely implemented across DeFi.
Given the combination of strong team competence, well-defined KPIs, and ecosystem alignment, we approved this proposal.
**Committed Yield RWAs on Arbitrum (Liqvid)**
Sourced through BD work, Liqvid is building institutional-grade infrastructure on Arbitrum for compliant tokenization, capital formation, and secondary liquidity for tokenized private market assets.
Their goal is to onboard the first $8-12M from institutional investors into initial tokenized deals, which expands Arbitrum’s RWA ecosystem beyond the more common asset classes.
Kandle Finance introduces a composable DeFi yield and liquidity infrastructure, built natively on Arbitrum using the ERC-4626 vault standard.
Their decision to prioritize fewer deliverables with higher expected impact, particularly from a TVL growth and partnerships perspective, shows a pragmatic and ecosystem-oriented approach.
**Protected Growth Tokens on Arbitrum (Exchequer)**
Sourced through BD work, Exchequer is the issuer standard for a new on-chain primitive called Exchequer Notes. Any ERC-20 project can issue a Protected Growth Token (PGT) with its native token to give buyers a defined outcome over a fixed term.
The protocol deepens project-owned liquidity in ways that are directionally aligned with Arbitrum’s DeFi ambitions.
The project’s strength lies in execution rather than novelty: a functioning business model, active partnership with 9 Payment Service Bank (9PSB), and a growing network of over 500 pre-onboarded retailers who already perform 10–50 million NGN in monthly settlements.
We approved Importapay as a pragmatic pilot to test whether Arbitrum can support compliant, high-frequency cross-border settlements in African trade markets.
Sourced through BD work, Bond Credit is building the first verifiable, confidential credit layer for autonomous agents on Arbitrum.
They score agents using ACE (Agentic Credit Engine), generate TEE-verified trust proofs, and issue the first agent-native credit lines onchain, while making Arbitrum the settlement layer.