Arbitrum Allocates $215 Million to Boost Web3 Gaming Industry

Bittime - Arbitrum, the leading Layer-2 solution on the Ethereum network, has just approved a proposal to pour $215 million into the crypto gaming sector.

These funds will be distributed through a new program called the Gaming Catalyst Program (GCP) over the next three years.

Domination of Arbitrum on DeFi Sector

Currently, Arbitrum is the largest Layer-2 in the Ethereum ecosystem. The chain ranks fifth globally in terms of DeFi Total Value Locked (TVL), behind only Layer-1 networks such as Ethereum, Tron, BSC, and Solana.

Various well-known DeFi protocols such as Uniswap, Aave, Pendle Curve, and others, are already operating on the Arbitrum chain.

Arbitrum's TVL itself is now at an all-time high, surpassing $3.1 billion. This figure is close to the historical peak of $3.2 billion recorded last March.

Compare that to July 2022, amidst a sluggish market, Arbitrum's TVL at that time was only around $600 million. This means that during this period, Arbitrum's TVL increased more than five times.

ARB Token Price Drops

In contrast to TVL which is currently rising, the price of Arbitrum's native token, ARB, has actually decreased by 15% in the last seven days.

This drop was likely triggered by news of the allocation of 225 million tokens to the GCP program.

As of last Thursday, the price of ARB was still above $1, approaching $1.1. However, on Friday the price plummeted to $0.95 and has not shown any signs of recovering.

This price level is equivalent to the level on May 20, so the decline on Friday erased all the increases that occurred during the last ten days of the previous month.

The peak price of ARB in 2024 occurred last January, breaking through the $2.2 mark. Since then, the price has continued to decline by 57%.

It is worth noting that this peak was an all-time high for ARB, which has only been present in financial markets for just over a year. This means that ARB is not participating in a major bull run in 2021.

Gaming Catalyst Program to Drive Web3 Games

The Gaming Catalyst Program (GCP) is a program that was recently approved by the DAO Arbitrum. The main goal of this program is to spur the growth of the crypto gaming ecosystem on Arbitrum.

Currently, Arbitrum is mostly used for low-cost compatible asset transactions and DeFi activities. Through GCP, Arbitrum wants to become a major player in the crypto-based online gaming sector.

The idea is to attract the best studios and games in the Web3 sector by pouring in funds of 225 million ARB tokens over the next three years.

GCP is designed to increase awareness and adoption of Arbitrum/Orbit/Stylus among developers and players.

The recent significant surge in the DeFi sector has encouraged the Arbitrum community to expand into the realm of crypto gaming.

The goal is to attract the best developers to create high-quality games that can attract and retain new users.

According to the originator of this program, the gaming/Web3 segment is currently relatively small, but is predicted to grow rapidly in this decade.

GCP Program Fund Allocation

Funds allocated through GCP will be focused on attracting and supporting high-quality developers.

These funds will be distributed mainly to developers who will build crypto games on Arbitrum. The form of support can take the form of joint investments with publishers approved and aligned with Arbitrum.

Publishers and developers will go through a series of selection processes to ensure alignment with GCP goals and Arbitrum DAO values.

• 160 million ARB tokens will be invested to attract and develop developers.
• 25 million ARB tokens will be allocated for game creation grants.
• 135 million ARB tokens will be used for investment.
• Another 40 million ARB tokens will be distributed in the form of infrastructure rewards.
• GCP will have a dedicated team to manage all program operations.

It is worth noting that 225 million ARB tokens equate to almost 8% of the current total token supply, which amounts to approximately 2.9 billion tokens. This was an important initiative that resulted in a 15% reduction in ARB value.

The Impact of the GCP Program and the Future of Web3 Gaming at Arbitrum

Arbitrum's decision to allocate significant funds to the Web3 gaming sector through the GCP program will certainly have an impact and open up opportunities in the future. Let's discuss some important points:

1. Growth Acceleration

With the injection of funds and support from GCP, the Web3 gaming ecosystem at Arbitrum is predicted to experience rapid growth.

This program can attract talented developers to create innovative games that will enrich the Web3 gaming world as a whole.

2. Improved Game Quality

The allocation of funds to support developers is expected to produce games of better quality. This will make Web3 games on Arbitrum more interesting and able to compete with traditional games.

3. Wider Adoption

The GCP program has the potential to drive the general adoption of Web3 games. With the arrival of high-quality games on the Arbitrum platform, the attractiveness of blockchain technology for the gaming sector will further increase.

Conclusion

The Gaming Catalyst Program (GCP) is a bold step taken by Arbitrum to enter the realm of Web3 gaming.

By pouring in large funds, Arbitrum has the potential to become a major player in the gaming industry based on blockchain technology.

However, to achieve success, the right strategy, continuous innovation and the ability to face existing challenges are needed.

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