Non-Constitutional
An initiative to accelerate innovation and secure Arbitrum’s leadership in the Layer 2 landscape through a dedicated, institutionally-backed investment vehicle.
Executive Summary
This proposal outlines a strategic initiative to establish the Arbitrum Ecosystem Fund, a dedicated investment vehicle managed in partnership with a premier venture capital firm or asset manager. The Fund will be capitalized to deploy strategic funding—through a combination of token grants, venture investments, and pilot program financing—to high-potential projects building on the Arbitrum network. By directing capital to critical infrastructure, DeFi, and tooling, this initiative will accelerate innovation, generate sustainable demand for the $ARB token, and signal institutional confidence in the Arbitrum ecosystem. This model has been successfully implemented by other leading blockchains, including Avalanche, Base, and Solana, demonstrating its efficacy in fostering vibrant, high-growth ecosystems.
The Opportunity: Accelerating Arbitrum’s Growth
Arbitrum has firmly established itself as a leading Layer 2 scaling solution for Ethereum, offering high throughput and low transaction costs. To maintain this market leadership and catalyze the next phase of growth, a dedicated and professionally managed funding vehicle is essential. The Arbitrum Ecosystem Fund will serve as a powerful engine for innovation, empowering developers to tackle ambitious technical challenges and bring novel on-chain products to market.
The Arbitrum Ecosystem Fund: A Strategic Framework
The Fund will operate with a clear mandate to foster a thriving, resilient, and innovative ecosystem on Arbitrum.
A. Mission and Investment Thesis:
- Mission: To identify and support the most promising teams and technologies building on Arbitrum, with a focus on projects that enhance the network’s core infrastructure, expand its DeFi ecosystem, and deliver compelling user applications.
- Investment Thesis: By providing strategic capital and expert support, the Fund will help projects navigate the challenges of early-stage development, achieve product-market fit, and contribute to the long-term value of the Arbitrum network.
B. Key Investment Areas:
- Infrastructure and Tooling: Projects that improve developer experience, enhance network security, and provide critical infrastructure for the Arbitrum ecosystem.
- Decentralized Finance (DeFi): Innovative protocols that expand the range of financial products and services available on Arbitrum, from decentralized exchanges to lending platforms and derivatives.
- Real-World Assets (RWAs): Platforms and protocols that facilitate the tokenization and trading of real-world assets on Arbitrum, bridging the gap between traditional finance and DeFi.
- Gaming and NFTs: Immersive on-chain gaming experiences and novel NFT applications that drive user adoption and engagement.
Precedent Analysis: A Proven Model for Success
The establishment of dedicated ecosystem funds has become a cornerstone of growth strategies for leading blockchain platforms.
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Avalanche: In a move to attract real-world applications, VanEck is set to launch its PurposeBuilt Fund in June 2025. This fund, managed by the team behind the $100M+ Digital Assets Alpha Fund, will channel strategic capital into high-potential businesses within the Avalanche ecosystem, focusing on sectors like gaming, financial services, and AI. This partnership validates Avalanche as a platform for serious, scalable ventures. ( VanEck Prepares to Launch PurposeBuilt Fund to Invest in Real-World Applications on Avalanche)
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Base: The Base Ecosystem Fund, launched by Coinbase Ventures in 2023, has already demonstrated significant impact. After reviewing over 800 applications, the fund made its first six early-stage investments in pioneering projects: Avantis, BSX, Onboard, OpenCover, Paragraph, and Truflation. This initiative leverages Coinbase’s expertise to nurture a new generation of on-chain applications. (Base Ecosystem Fund announces first six investments)
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Solana: On April 21, 2025, Astra Fintech unveiled a $100 million Solana Ecosystem Fund to accelerate innovation on the network. Building on its success with projects like Mulex, DEPE, and MoNE, Astra Fintech is also driving a strategic expansion in Asia, with Korea as a regional hub. This demonstrates a commitment to not only funding but also fostering a global developer community. ( Astra Fintech Launches $100M Solana Ecosystem Fund)
Core Advantages of the Arbitrum Ecosystem Fund
- Strategic Capital Deployment: Ensures that funding is aligned with Arbitrum’s technical roadmap and long-term governance priorities.
- Rigorous and Selective Investment Process: A professional due diligence process minimizes risk and maximizes the potential for high-impact outcomes.
- Network Synergies: By funding foundational infrastructure and cross-chain tooling, the Fund will amplify network effects across the entire ecosystem.
- Enhanced Developer Collaboration: The Fund will foster a collaborative environment, providing ongoing support and feedback to portfolio projects to accelerate iteration and strengthen protocol security.
- Ecosystem Resilience: Diversifying investments across DeFi, NFTs, infrastructure, and other key sectors will reduce dependence on any single project and create a more robust and adaptable ecosystem.
- Organic $ARB Demand: The allocation of tokens for grants and milestone-based funding will create consistent, predictable buy-side pressure for the $ARB token as projects utilize their funding.
Conclusion: A Catalyst for the Future
The launch of the Arbitrum Ecosystem Fund represents a pivotal next step in Arbitrum’s evolution. By adopting a proven, institutionally-backed model, Arbitrum DAO can:
- Drive Sustainable and Mission-Critical Growth: Seed the next generation of projects that will expand use cases and drive on-chain activity.
- Generate Recurring Demand for $ARB: Create a predictable and sustainable mechanism for buy-side pressure through structured token provisions and grants.
- Signal Unwavering Institutional Confidence: A partnership with a marquee venture firm or asset manager will underscore Arbitrum’s leadership in Layer 2 innovation and attract further institutional participation.
- Reinforce its Market-Leading Position: A dedicated investment vehicle is a powerful statement of financial innovation and a long-term commitment to decentralized governance and ecosystem growth.
This initiative will catalyze Arbitrum’s next phase of expansion, driving value creation and securing its position as the premier destination for developers and users in the decentralized economy.