CoinDesk
Paxos-issued USDG is launching across Arbitrum’s DeFi ecosystem, with integrations including Morpho, GMX, Fluid and Maple, and Kraken providing on- and off-ramps. Arbitrum is joining the Global Dollar Network to seek a share of the economics generated by stablecoins circulating on its network, which holds about $3.8 billion in stablecoins. Circle’s USDC accounts for roughly 60% of that total.
Why it matters
USDG is backed one-for-one by dollar reserves and has more than $3 billion in circulation across networks. The Global Dollar Network says it distributes rewards generated by USDG reserves among partners that help drive adoption, giving Arbitrum and participating builders a potential stake in growth that stablecoin networks do not automatically provide.
A governance proposal asks ArbitrumDAO to make USDG growth a strategic priority, add 100 million ARB to its DRIP incentive program and use treasury assets to support USDG liquidity. Arbitrum Foundation investment strategy head Brendan Ma said the arrangement gives the network and its builders “a stake in the growth upside.”
Market impact
The launch connects USDG with trading, lending and payments applications on Arbitrum, including Li.Fi, Gauntlet, Steakhouse and LayerZero. Uniswap and Fhenix are set to follow. The network’s ability to attract liquidity and users will matter to whether it earns meaningful returns from the partnership.
The move comes as stablecoin alliances compete for distribution and reserve economics. OpenUSD has backing from Mastercard, Visa, Stripe, Coinbase and Shopify, while European initiative Qivalis is backed by 37 banks. Arbitrum is also seeking ecosystem revenue through Robinhood Chain, the brokerage’s planned Ethereum-based network, under an agreement to share a portion of user-activity revenue.
Frequently asked questions
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How does Arbitrum aim to earn from USDG adoption?
The Global Dollar Network distributes rewards generated by USDG reserves among partners that help drive adoption. Arbitrum is joining the network to seek a share of those economics.
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How much stablecoin value is currently on Arbitrum?
Arbitrum holds about $3.8 billion in stablecoins. Circle’s USDC accounts for roughly 60% of that amount.
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What does the ArbitrumDAO proposal include?
The proposal asks the DAO to prioritize USDG growth, add 100 million ARB to its DRIP incentive program and use treasury assets to support USDG liquidity.
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Which Arbitrum applications are integrating USDG?
Initial integrations include Morpho, GMX, Fluid, Maple, Li.Fi, Gauntlet, Steakhouse and LayerZero. Uniswap and Fhenix are set to follow.
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Which other groups are building stablecoin alliances?
OpenUSD has backing from Mastercard, Visa, Stripe, Coinbase and Shopify. European initiative Qivalis is backed by 37 banks.
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