From governance to growth, the first half of 2025 marked a transformative period for the Arbitrum ecosystem and the DAO.
Key highlights of the broader ecosystem included Robinhood’s launch of tokenized stock trading on Arbitrum One, stablecoin supply surpassing $6B across Arbitrum chains, RWAs and gaming expansions on Arbitrum breaking new records, and 100+ chains choosing to leverage the Arbitrum Orbit stack.
Consistent with its commitment to transparency, the Arbitrum Foundation is sharing the H1 2025 Progress Update, showcasing what’s been achieved and setting the stage for the rest of the year:
Fostering Ecosystem Growth
Driving growth and innovation is a core mandate of the Arbitrum Foundation. In H1 2025, 56 projects were approved for grants and strategic partnerships across categories, including decentralized finance (DeFi) & fintech, gaming, infrastructure, and the Orbit ecosystem, with DeFi receiving the largest share.
The Foundation also announced short-term, specialized grant programs to support new growth areas, including Trailblazer Program 2.0 and the launch of ArbiFuel. Trailblazer 2.0 supports top initiatives in the DeFi agent ecosystem, while ArbiFuel’s gas-free sponsorship program accelerates go-to-market for developers.
Developer Education & Community Initiatives
Technical Education, Builder Support, and Ecosystem Enablement
Developer education is essential for ecosystem growth. The Foundation’s expanded Developer Relations (DevRel) team equipped builders with the right tools and imparted quality technical education across major events, including ETHCC, ZK Hack, WeAreDevs, ArbiLink HK, Bitso’s MXNB Hackathon, and several other regional events.
The Foundation also expanded its education and content repository, which now includes a library of Stylus workshops, coding videos, Farcaster mini-apps, interviews, features in newsletters, and, in collaboration with BuidlGuildl, an Arbitrum extension for Scaffold-ETH.
Arbitrum Brand Narrative & Expanded Presence
The “Arbitrum Everywhere” narrative is a core focus of the streamlined Arbitrum brand strategy this year. The Arbitrum Everywhere vision was deliberated and amplified by credible third-party research firms like Messari and Blockworks. The Arbitrum Everywhere launch video and brand posts received ~37,000 engagements. Further initiatives, such as the Land of Liquidity SBT NFT, commemorating Arbitrum ecosystem builders and community members on the second anniversary of the ArbitrumDAO, received a record-breaking 152,920 mints, tripling the previous year’s number.
The Foundation continued building Arbitrum’s social footprint through a network of educators, influencers, and advocates. Of particular note was the Arbitrum Yapper Leaderboard, a 3-month campaign in which Arbitrum reached the top of Kaito’s mindshare rankings, driven by thought leadership from Arbitrum Ambassadors, contributors, and partners.
The Ambassadors Program experienced its most ambitious expansion yet in H1 2025, adding four new regions (Brazil, Korea, Greater China, and the Philippines) to the existing three chapters (India, Mexico, and Nigeria), spanning 7 regions at the end of June.
Technical Progress
The Arbitrum Foundation supported a series of important technical upgrades in H1 2025, many of which were passed by the ArbitrumDAO.
Significant advancements include:
Timeboost: A new transaction ordering policy for Arbitrum One and Nova. This enables faster inclusion, more efficient block times, and has generated over $2M in transaction fees for the ArbitrumDAO as of June 2025.
ArbOS Callisto: Adds support for Ethereum’s Pectra upgrade, improving developer and user experiences.
Bounded Liquidity Delay (BoLD): A new dispute resolution protocol that enables permissionless validation while reducing the risk of delay attacks.
Governance facilitation
Supporting ArbitrumDAO governance throughout its lifecycle remains central to the Foundation’s mission. While the Foundation continues playing a key role in administering a number of other DAO initiatives, H1 2025 brought heightened focus on ensuring the DAO’s long-term sustainability and ecosystem expansion.
Noteworthy efforts included:
Security Council March 2025 Cohort Elections: The Foundation facilitates Security Council elections every 6 months, with 6 new members who were elected in the March 2025 cohort.
Creation of the Operation Company (OpCo): The Foundation supported ArbitrumDAO’s approval of OpCo as a dedicated operational layer to handle execution of DAO proposals, improve continuity, and coordinate service providers, backed by 30M ARB over 30 months. The Foundation has undertaken a non-voting observer role on the Oversight and Transparency Committee (OAT), which will oversee the OpCo.
Vision for the Future: The Foundation introduced a long-term strategy for improving operational efficiency and expectations within the ArbitrumDAO, developed together with Offchain Labs.
The first half of 2025 delivered exciting milestones across the Arbitrum ecosystem, and the Arbitrum Foundation looks forward to continuing its collaboration with the community, developers, and partners in the second half of 2025.
Thank you for sharing this detailed H1 2025 update . It’s encouraging to see progress across technical upgrades (BoLD, Timeboost), ecosystem expansion (56 new grants), and governance structures like the OpCo and Oversight & Transparency Committee.
One reflection from my policy background: as ArbitrumDAO continues to scale, the challenge will be balancing ecosystem growth metrics (e.g., DeFi, Orbit adoption) with governance sustainability metrics (e.g., transparency of OpCo operations, accountability of grant programs).
Would it be possible for future bi-annual reports to include a set of governance KPIs alongside growth KPIs — for example, number of proposals executed by OpCo, participation rates in Security Council elections, or transparency reports published by funded programs?
“I believe tracking these governance indicators would significantly strengthen legitimacy and provide Citizens and delegates with a clearer framework for evaluating the DAO’s long-term health. Would the Foundation or the OAT committee be open to community input on defining such KPIs?”
It’s great that such programs exist
However, it’s very bad that there was practically no coverage of them and most people learn about them in the half-year report
For example, for Arbifuel this is critical, since the report was released after the program had already ended
It would be nice to share such information on the forum for its wider dissemination with the help of delegates
Thank you to the Foundation team for this comprehensive H1-2025 recap. It’s valuable to see the hard work and strategy surrounding technical upgrades and ecosystem growth.
In particular, we want to express strong appreciation for the efforts and resource dedication toward growing the DeFi ecosystem on Arbitrum — whether through the Trailblazer program or more broadly via the Ecosystem Growth budget, where DeFi & Fintech are the largest slice. DeFi is a proven use-case, and seeing AF invest in increasing Arbitrum’s market share in that vertical gives us confidence in the long-term trajectory.
Thanks for the report. A couple forward-looking questions:
While not immediately around the corner, it looks like the Foundation will need to make another funding request in 2026. Is the current expense rate (operating + grants and other expenses) anticipated to grow, slow, or remain about the same?
Timeboost was immediately accretive, but Arbitrum has a long way to go to reach financial sustainability. It still earns ~50% the fees on TVS as Optimism, although that asset base is more than 6x larger. (0.2% fees per $1 secured for Optimism, 0.1% fees per $1 secured for Arbitrum).
Are there any other technical improvements to increase revenue at the margins or should governance begin to come up with additional, sustainable revenue streams so ARB is not the main source of financing further growth and development?
Reading through the progress update, one of the main things that stands out to us is just how comprehensive the Foundation’s approach has become in trying to balance ecosystem growth, governance, and long-term sustainability. These updates can sometimes feel like a laundry list of activities, but in this case, it feels like there’s a clear narrative. The detail around Trailblazer, gaming, and DeFi allocations gives us a pretty good and real sense of where the Foundation believes Arbitrum’s comparative advantage lies, which is useful for both builders and tokenholders trying to understand the bigger picture.
It’s good to note the acknowledgment that DeFi and Fintech remain the largest areas of allocation. This makes sense when we consider that Arbitrum’s identity and adoption story have always been closely tied to providing scalable infrastructure for Ethereum-native DeFi protocols.
One open question that I think the community should keep pressing on is how the Foundation plans to measure the impact of these allocations in a way that’s transparent and outcome-oriented. It’s encouraging to see funds distributed, but what matters most is whether these initiatives translate into higher developer retention, more unique users, and stronger network effects. We’d be interseted to see future updates go even deeper on metrics that show not just “what” was funded, but “what happened as a result.” That kind of accountability would go a long way in helping the community stay aligned and engaged, and it would make updates like these even more meaningful as a tool for reflection and debate.
Dear AF, this does not look like a transparency report.
It’s more of a “status update” / marketing report. Useful for the broad market, not what the DAO needs in my opinion.
There’s almost no data to actually back up or understand the claims.
Some examples:
The DAO should expect enough information to verify claims, assess alignment with the mission, and understand how resources are being used.
At the very minimum, that means publishing the partners’ names, the amounts allocated, and the purpose of the funding. If we want to aim for excellence (which we should), there should be full transparency with a breakdown of grant size, milestone structure, rationale, KPIs, and oversight - just like the DAO does.
Ex 2: “Developer Education and Builder Support”. Great objectives, but what are the KPIs? How are we tracking against those? How many builders have been onboarded, how many are still active, ecc?
Ecc.
A bit condused by the lack of mentions of Offchain Labs in chapter 2 “Fueling Technical Progress”, since the majority of the technical updates (Timeboost, BOLD, etc.) actually come from them as far as I know. Would be good to understand the rationale here, since the report is titled Arbitrum Foundation Transparency Report - so we also know how to communicate this
The report doesn’t provide a strategic overview of objectives and plans. Without clear priorities and goals for H2 and beyond, it’s hard for the DAO to know how to help or where to align.
I appreciate the work put into this report (which again I think can work for the broad market).
I also understand that some details might be commercially sensitive or under NDA. Yet, the DAO is entitled to more information given that the DAO provided the funding.
We can do better on the transparency front, as it’s also a core part of the industry ethos.
Thanks for the report detailing the activities, but what as a community we would like to see impact. This detailed report surely gives and overview on activates undertaken under various categories, pls also share what was the laid out outcome v/s achievements against it (KPI).
I would like to appreciate all the effort made by members of Arbitrum Foundation and Arbitrum DAO and would request change in the format of reporting to KPI and its achievements.
We agree that governance health deserves the same reporting discipline that we apply to demonstrating growth. The current report includes a dedicated governance section that highlights proposals submitted by the Foundation and we will expand this in future reports.
Governance KPIs present different measurement challenges to on-chain growth metrics. Participation rates and proposal execution for example are less straightforward to quantify than TVL or transaction volume, but they can be tracked.
This is an area where we are keen to evolve our reporting. We will work to identify which governance metrics can be consistently measured and are most indicative of governance health for inclusion in future reports. Additionally, this is something that we may collaborate with the Arbitrum OpCo Foundation on.
Thank you for the question. It is an important one and we will answer it plainly.
Our view is simple: maintaining Arbitrum’s lead requires continued ecosystem and technology investment. On the current trajectory, that means engaging with the DAO in the near to medium term to discuss funding.
Operating costs continue to be stable. In the first half of 2025, our opex was $32.79m, an annualized run-rate of roughly $65.6m, broadly in line with the 2024 total. Operating expenses are projected to increase modestly on a year-over-year basis in 2026. The anticipated growth reflects the impact of inflationary adjustments, incremental headcount additions, and continued investment in technical enhancements. These increases are expected to be partially offset by reductions in certain major vendor costs, following the successful renegotiation of contracts undertaken by AF.
Grant and ecosystem-related expenditures will continue to be driven by milestone achievements of existing grantees, as well as by the initiation of new grants and partnership commitments. Based on the current pipeline, AF anticipates that grant-related expenses will also grow on a year-over-year basis in 2026.
We continue to deploy significant resources to ecosystem growth. In the first half of 2025, we allocated $24.36m plus 13.17m ARB to grants, partnerships and other targeted initiatives. These efforts are delivering results across stablecoins, institutional partnerships, DeFi, real-world assets and Orbit expansion. To maintain this momentum in a competitive market, we expect to continue today’s level of ecosystem and technical investment while maintaining operating discipline and ensuring high ROI across all teams.
This approach means planning for a funding conversation with the DAO in due course. When we return, we will provide a comprehensive view of ecosystem progress and outcomes from this investment period as detailed in our transparency reports.
Driving continued revenue growth remains a key priority for the ArbitrumDAO. Over the past year, several additional revenue drivers have been established, including Timeboost, the institutionalisation of the Arbitrum Expansion Programme and the initiation of treasury management activities. Many of these efforts are still early and, like Timeboost, will continue to evolve as we gather broader participation data and optimize performance.
Offchain Labs is actively monitoring Timeboost, evaluating potential adjustments to improve efficiency and participation, and continuing business development to onboard additional participants to the protocol. At this stage, it is early to implement significant changes before wider participation metrics are available.
In parallel, the DAO is encouraged to explore additional, sustainable business lines in coordination with the OpCo. AAEs are already working on initiatives aligned with this objective. Taken together, these efforts aim to build a more diversified and resilient set of revenue streams over time, reducing reliance on ARB emissions and supporting the DAO’s long-term financial sustainability.
We agree that impact should be visible and outcome-oriented. Funding is a means; what matters to the DAO is whether initiatives drive developer retention, attract new unique users and contribute to stronger network effects across the ecosystem.
The Foundation evaluates grants and partnerships based on on-chain impact and Arbitrum alignment. When assessing the impact of grants, we focus on metrics that demonstrate real traction:
Daily Active Users (DAU) and user retention
Transaction volume generated on-chain
Total Value Locked (TVL)
Product-market fit within the Arbitrum ecosystem
Developer activity post-funding
Network effects - whether projects attract additional builders and users
For strategic partnerships, we also assess milestone achievement, go-to-market execution and contribution to priority verticals.
We publish ecosystem-wide metrics in our transparency reports. Individual grantee and partnership details often cannot be disclosed due to confidentiality restrictions, particularly where projects are in sensitive development or competitive phases.This is common practice across major protocols and foundations operating in competitive markets, not specific to Arbitrum.
The transparency report provides aggregate spending by category, named examples of major partnerships, total ARB and USD amounts deployed, as well as the strategic rationale for programme areas.
The constraint we have is commercial sensitivity. Many strategic partnerships include terms that are confidential including milestone structures, pricing and strategic roadmap details. In many cases, disclosure limits are contractual. The Foundation advocates for transparency in all negotiations, but we cannot expect all partners to accept public disclosure of commercially sensitive terms, nor can we breach confidentiality agreements.
This challenge is not unique to Arbitrum; major protocols and foundations face similar tensions when operating in competitive markets where partnership terms become strategic intelligence.
Strategic partnerships require partner consent for detailed disclosure. We will continue to push for maximum transparency while respecting the commercial realities that enable us to attract significant partnerships.
On your specific questions about Developer Education: The Foundation tracks developer engagement metrics including workshop attendance, content adoption, builder onboarding and retention rates. Beyond initial engagement, we have implemented structured follow-through mechanisms to ensure builders continue developing on Arbitrum.
We have launched a pilot Hackathon Winners Mentorship Programme, initially trialled with standout projects from our in-person hackerhouse in India. The programme runs for three months and combines biweekly one-to-one mentorship with assigned Foundation mentors and group workshops.
The programme takes teams through the complete journey from hackathon project to viable project, covering business model development, go-to-market strategy, fundraising preparation, brand building, user acquisition, tokenomics design, technical roadmapping and pitch deck refinement. Each team receives tailored guidance on using Arbitrum ecosystem resources, infrastructure support and partnership development.
We are tracking concrete success metrics for this first cohort:
Deployment rates with at least one MVP or mainnet launch per team
On-chain activity
Continuation rates post-programme
Project maturity
Fundraising readiness
This pilot programme serves two primary purposes:
First, it delivers intensive support to promising builders.
Second, it generates insight into what early-stage teams need to succeed.
These learnings will inform a larger mentorship initiative for future hackathon participants, creating a predictable pathway from first engagement to sustained success on Arbitrum.
R&D expenses cover payments to technical and research service providers, external security audit providers and other related expenses. Technical infrastructure includes hosting, node infrastructure providers, the Security Council and associated operational expenses.
To enable continued technical improvements, the Foundation is collaborating with Nethermind and Erigon for infrastructure development beyond the core Geth client. Nethermind and Erigon are building alternative client implementations for the Arbitrum Nitro stack. These efforts contribute to improving client diversity, optimising for different use cases such as storage efficiency and performance, reducing single-client dependency risk and supporting a range of operator needs across the growing ecosystem.
The Foundation also works closely with Offchain Labs to maintain a coherent long-term roadmap. In practice, this means regular milestone reviews with service providers (such as Nethermind and Erigon), joint assessment from both organisations to ensure requirements are met, coordination between Foundation-funded infrastructure work and OCL’s core protocol development, as well as alignment on priorities for ecosystem advancement.
A key objective is expanding the ecosystem of technical contributors to the Arbitrum codebase. The Arbitrum Expansion Programme is an important mechanism to achieve this. Under the Programme, chains deployed using Arbitrum technology outside Arbitrum One contribute 10% of their Protocol Net Revenue, with 2% directed to the Arbitrum Developer Guild. Chains that settle to Arbitrum One remain free and permissionless to use.
Fees are routed via AEP Fee Router smart contracts to the Arbitrum Foundation and subsequently to the Arbitrum DAO treasury and the Foundation tracks compliance based on receipts through these routers. The Programme balances independence for projects with value accrual to the community and is intended to evolve over time. Part of the contributed revenue funds the Arbitrum Developer Guild, which will soon begin to incentivise contributors to the Arbitrum codebase.
The transparency report focuses on liquid and accessible assets, which represent the resources available for current operations and programmes. We anticipate returning to the DAO in the near to medium term for a funding discussion. This is part of responsible long-term planning for the Foundation’s sustainability beyond the initial distribution ending in April 2027.
. It’s encouraging to see progress across technical upgrades (BoLD, Timeboost), ecosystem expansion (56 new grants), and governance structures like the OpCo and Oversight & Transparency Committee.
