DRIP November 2025 Update

DAO Programs & Initiatives DeFi Renaissance Incentive Program (DRIP)
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Program Finances: Epochs 6-7

During November DRIP Season One progressed through the performance phase. There were two noteworthy events that have impacted the program’s budget in epochs 6 and 7: the unwinding of leverage positions due to Stream Finance’s solvency crisis and the decision to restart ETH incentives on Aave in Epoch 6. A total of 1.595M ARB was allocated across the two epochs from the base budget and 2.47M ARB from the discretionary budget, which includes Aave and Silo’s allocations for both epochs and incentives for syrupUSDC markets on Fluid. The following is the allocation per epoch, broken down by lending market:

Epoch 6:

  • Aave: 1.2M ARB
  • Morpo: 110K ARB
  • Fluid: 340K ARB + 10K for borrowing USDC from syrupUSDC/USDC market
  • Euler: 290K ARB
  • Dolomite: 60K ARB
  • Silo: 25K ARB

Epoch 7:

  • Aave: 1.2M ARB
  • Morpo: 140K ARB
  • Fluid: 360K ARB + 10K for borrowing USDC from syrupUSDC/USDC market
  • Euler: 235K ARB
  • Dolomite: 60K ARB
  • Silo: 25K ARB

To date, a total of 6.775M out of the 16M ARB has been allocated to lending markets from the base budget and 2.875M ARB out of the 8M ARB has been allocated from the discretionary budget. With rewards currently scheduled to begin tapering in December, Entropy is anticipating that not all of the 24M budget will be utilized.

Data & Metrics from Epochs 5, 6, & 7 (still in progress)

As we mentioned in the previous monthly update, Entropy expected the Stream Finance situation to impact market sizes on certain lending markets where impacted curators operate. This proved to be the case as we observed a sharp decline in Morpho’s Arbitrum market size from its peak of ~$490M in epoch 4 to ~$268M by the end of epoch 5. We observed smaller declines (between 7.5% and 16.7%) on other lending markets during the same period. As we came to the conclusion of epoch 5, discussions with curators led us to believe that there would be a period of reduced interest in yield-bearing stablecoin loops and when combined with the conclusion of competing ETH incentive programs, Entropy felt this was the best opportunity to resume rewards on Aave and shift the focus of the program back towards yield-bearing ETH assets. The tapering of incentives for lending protocols where there was a stablecoin focus contributed to a continued decline in epoch 6, but in epoch 7 we are seeing the USD pool and market sizes beginning to level out and slightly increase.

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The resumption of rewards on Aave, lets them be the only protocol over the last month to not experience a decline in market size. Since the start of epoch 6, the WETH market size has increased by ~76K and Arbitrum is now the largest L2 Aave instance.

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DRIP Month 3 Highlights

Note: The data below is as of December 5th, which includes part of epoch 7. Metrics and stats are based on growth from the start of epoch 5 (October 29th).

1. Program Overview / Arbitrum Network Overview

  • Arbitrum Lending Market Size declined by $620M / 18% to $2.76B while ETH’s price dropped 27% during the same period
  • Although the Market Size of ETH was flat this month in terms of USD value, in ETH terms it grew by 68K ETH / +40% to 231K ETH
  • USDC circulating supply increased from $1.94B to $2.31B (19%)
  • ETH circulating supply increased from 810k to 831k (2.7%)
  • Combined Stablecoin Market Cap of Eligible USD Assets stayed relatively flat at $1B
  • Arbitrum Bridge saw an inflow of +$550M in the last 30 days

2. Top Protocols highlights on Arbitrum:

  • Aave:
    • ETH-derivatives saw a net inflow this month of +$160M / +13%, with WETH and rsETH recording +$309M this month
    • rsETH alone on Aave has nearly tripled this month to $283M Market Size

3. Top Assets highlights on Arbitrum:

  • rsETH was the fastest growing ETH-derivative this month, increasing by $166M / +156% to $267M Market Cap and is now the 2nd largest ETH Asset by Market Cap on Arbitrum
    • 25% of rsETH now resides on Arbitrum (prior to DRIP, it was only 1.75%)
  • thBILL is now the 3rd largest USD Asset by DEX Liquidity, contributing to 18% / $14.5M of the $80M DEX Liquidity

Notable Events:

  • PT-USDai and PT-sUSDai both expired on 20th November which drove a significant portion of USDai’s decline in Lending Market Usage
  • On December 3rd, we saw the largest daily ETH inflow into Arbitrum’s Lending Markets at $70M - most of which went to Aave

The impacts of DRIP and its performance can be tracked with the following public dashboards:

Lending Markets: https://dune.com/entropy_advisors/drip-season-1-lending-protocols
ETH Assets: https://dune.com/entropy_advisors/drip-season-1-eth-assets
USD Assets: https://dune.com/entropy_advisors/drip-season-1-usd-assets

DRIP Marketing

Entropy has continued to work with the Arbitrum marketing team and participants to amplify the DRIP program and its opportunities.

Epoch Announcements:

Weekly Stat Recaps:

Protocol Highlights:

Additional Coverage:

Continued features on

Looking Forward

Season One is still scheduled to end on January 20th, 2026. Epoch 8 marks the final epoch of the performance period, after which tapering of rewards will begin across lending markets. The focus of Season 2 is still in discussion and Entropy is targeting mid-February for its launch.

Disclaimer

Participation in the DeFi Renaissance Incentive Program (“DRIP”) involves risks. Leveraged strategies such as looping can result in liquidation or total loss of funds. ARB rewards do not compensate for potential losses. You should carefully assess your own risk tolerance before participating.

Nothing in this post or the DRIP program constitutes financial, legal, or investment advice. All participants are solely responsible for their own decisions and for complying with all applicable laws and regulations in their jurisdiction.

Rewards are not guaranteed. The amount and distribution of ARB depends on program parameters and user activity. Program terms, eligible assets, and budget allocations are subject to change at the discretion of the ArbitrumDAO.

Merkl, the Arbitrum Foundation, and the DRIP Committee are not responsible for smart contract risks, protocol vulnerabilities, or losses incurred on third-party platforms. DRIP is a community-governed initiative: Entropy Advisors manages program operations but does not control ArbitrumDAO governance or treasury decisions.

Merkl, the Arbitrum Foundation, and the DRIP Committee shall have no liability to you should they fail to make a payment of rewards to you, for any reason, including without limitation whether this be in relation to the amount you do or do not receive or a payment that does not go to your nominated wallet address. If you receive a payment that is not intended for you or if you receive more than you should have received, you shall, upon request, immediately return this to an address nominated by the Arbitrum Foundation.