Tokenomika Arbitrum (ARB)

The Arbitrum (ARB) token is central to the governance and incentive structure of the Arbitrum ecosystem, which includes Arbitrum One and Arbitrum Nova. The tokenomics are designed to facilitate decentralized governance through the Arbitrum DAO and incentivize ecosystem growth through strategic allocations and vesting schedules.

Issuance Mechanism

The ARB token was launched on Arbitrum One on March 16, 2023, as an ERC-20 equivalent token.

• Total Supply: The total token supply is 10.00 billion ARB.
• Inflation: The token launched with a maximum inflation rate of 2% per annum.
• Token Functionality: ARB is primarily a governance token for the Arbitrum DAO. It does not currently serve as the gas token for transactions on Arbitrum One (which uses ETH), nor does it confer claims on capital, a share of profits, or other legal rights in the Arbitrum Foundation or Offchain Labs. There are currently no token burning or buyback mechanisms featured or planned.

Allocation Mechanism

The total supply of ARB is distributed across various stakeholders, with the largest portion allocated to the Arbitrum DAO Treasury.

The token allocation breakdown is as follows:

The Arbitrum DAO Treasury holds the largest share, which the DAO can spend and allocate as determined by governance proposals.

Usage and Incentive Mechanism

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

Governance

ARB serves as the governance token for the Arbitrum DAO, allowing tokenholders to:

• Enact changes to Arbitrum One and Arbitrum Nova smart contracts.
• Allocate treasury funds.
• Amend the Arbitrum DAO Constitution.
• Authorize new Orbit Chains.

Tokenholders can participate in off-chain governance via Snapshot and on-chain governance via Tally. Any ARB tokenholder can vote on proposals and delegate their associated voting power to another address.

Ecosystem Incentives

ARB tokens are used to incentivize ecosystem participants through various programs:

• User Airdrop: Approximately 1.16 billion ARB (11.62% of total supply) were airdropped to wallet addresses on March 23, 2023, based on pre-defined eligibility criteria.
• DAO Airdrop: 1.13% of the total supply was airdropped to various DAOs and protocols within the Arbitrum ecosystem.
• Short-Term Incentive Program (STIP): Allocated 50.00 million ARB (0.50% of total supply) to ecosystem protocols, with additional funds allocated through the STIP Backfund and STIP Bridge programs.
• Gaming Catalyst Program (GCP): Approved in June 2024, this program allocated up to 225.00 million ARB (2.25% of total supply) to gaming projects over a three-year period, broken down into Build Grants, Investments, and Infrastructure Bounties.
• DAO Treasury Allocation: The DAO can use its substantial treasury allocation (35.3% of supply) to fund future incentive programs.

Security and Dispute Mechanism

While ARB is not currently used for bonding in the core Arbitrum One validation process (which uses ETH for bonds in the BoLD dispute protocol), the DAO has the discretion to change the required bonding asset to ARB in the future.

• Sequencer Profits: Sequencer profits (the net difference between L2 fees collected and L1 fees paid) are transferred to the DAO treasury, providing a source of free cash flow that generates value for the token, even if not directly distributed to tokenholders.

Locking Mechanism and Unlocking Schedule

The ARB token distribution includes significant lockups and vesting periods for core stakeholders to ensure long-term alignment.

Vesting Schedule

The ARB token is scheduled to be fully vested by March 2027. The vesting mechanism involves a monthly unlock of approximately 1.1% of the total supply.

• Offchain Labs Team, Advisors, and Investors: These allocations are subject to a four-year vesting schedule, with the first major monthly unlock occurring one year after the token launch (March 23, 2024), followed by monthly unlocks for the remaining three years.
• Arbitrum Foundation: The Foundation's allocation of 7.5% had 50.00 million ARB (0.50% of total supply) immediately available, with the remaining 700.00 million ARB (7.00% of total supply) vesting linearly over four years.

Upcoming Daily Unlocks

The vesting schedule results in consistent daily unlocks. For instance, in the period starting December 30, 2025, the daily unlock amount is approximately 513,347 ARB, representing about 0.01% of the circulating supply each day.

Example Monthly Unlock Breakdown

The monthly unlocks are distributed across the vested categories. For example, in July 2025, the total unlock is projected to be 108.56 million ARB, distributed as follows:

• Offchain Labs Team & Advisors: 56.1 million ARB
• Offchain Labs Investors: 36.5 million ARB
• Arbitrum Foundation: 15.9 million ARB