Introducing DRIP: The DeFi Renaissance Incentive Program on Arbitrum

The DeFi Renaissance Incentive Program, designed by Entropy Advisors and powered by Merkl, is a $40 million initiative funded by ArbitrumDAO to drive targeted growth across DeFi verticals. Season One, running from September 3, 2025 to January 20, 2026, focuses on leverage looping in lending markets on Arbitrum One. Users earn ARB rewards by borrowing ETH or USDC against yield-bearing collateral assets, with incentives distributed based on performance and time-weighted borrowing activity.

Key Ideas

Performance-Based Incentives: DRIP rewards users for borrowing activity across multiple lending platforms, encouraging organic liquidity and efficient capital use.
Protocol-Agnostic Design: Incentives are distributed across various markets and assets, including ETH-type and stablecoin collateral, with Pendle derivatives also eligible.
Phased Rollout: The program begins with a discovery phase (15% budget) and transitions into a competitive performance phase where successful markets earn more rewards.

Why It Matters?

Startups can launch lending platforms or collateral products that qualify for DRIP incentives, positioning themselves to capture liquidity inflows. They should monitor epoch performance and adjust product offerings to align with high-performing categories, maximizing visibility and user engagement. They should evaluate strategic partnerships with Entropy or Merkl, and consider adopting performance-based reward systems to drive meaningful user actions rather than vanity metrics.