Arbitrum chooses to fund PancakeSwap, GMX while Lido gets left out

• Arbitrum chose GMX and PancakeSwap as part of the 29 approved recipients.
• ARB circulation increased while GMX and CAKE’s TVLs dropped.

Lido Finance [LDO] did not make the cut in Arbitrum’s [ARB] latest funding round. In September, with a mission to fend off competition in the Ethereum [ETH] L2 ecosystem, Arbitrum DAO revealed that it would support some DeFi projects operating on its chain.

Realistic or not, here’s ARB’s market cap in LDO terms

CAKE and GMX get in

According to 0xRamen, an analyst at Ouro Research, Arbitrum chose 29 projects for the grant based on the voting result of its community. Out of the 49.6 million ARB tokens distributed, decentralized perpetual exchange GMX had the highest. 

1/ @arbitrum round 1 grant application has officially come to an end

Congratulations to the 29 projects which will collectively receive 49.6m ARB

Delegates came through in the last couple of hours, with all proposals achieving quorum pic.twitter.com/mu3MSYFiYM

— 0xRamen (@0xRamenUmai) October 13, 2023

In fact, it seemed that the Arbitrum community had a strong preference for perp projects. This was because others like MUX Protocol, Perennial Laba also got the support. While perps accounted for 44% of the total funding, DEXes were second on the list as they got 15% of the funds.

Among the DEXes that made the list was PancakeSwap [CAKE].  A look at the voting snapshot showed that about 100 projects applied for the grant. However, rejection in this round does not entirely mean that the projects that missed out are out of the race as they’d likely be in another round.

Terms and conditions follow hikes and declines

Meanwhile, in the derivatives category, GMX has been able to maintain its lead over other perp platforms. According to Defi Llama, GMX’s Total Value Locked (TVL) was $447.33 million at press time.

The TVL represents the amount of liquidity locked in smart contract protocols under a chain. However, it is noteworthy to point out that the GMX TVL decreased in the last 30 days. But with Arbitrum’s latest support, it is possible for the value to increase. If this happens, it would imply that market players find the derivative protocol more trustworthy than before. 

Source: DeFi Llama

PancakeSwap’s TVL also dropped within the same period as GMX. However, the only difference between the two was that the AMM was behind Uniswap [UNI] and Curve Finance [CRV] in the standings.

For Arbitrum, the approval of the funds had affected ARB in circulation. Accoridng to Santiment, the ARB one-day circulation increased to 136.5 million. Circulation shows the number of tokens/coins used within a specific period.

Therefore, the hike means that there has been more ARB utilized in transactions than there were on 11 October.

How much are 1,10,100 ARBs worth today?

Source: Santiment

Additionally, a multi-sig wallet would be created to retrieve the funds if any project was found violating the terms and conditions of the grant.