The Arbitrum DAO spent millions of dollars to motivate users but on April 4, 2025, researchers showed their incentive programs did not work well The marketing studio Pink Brains evaluated how well Arbitrum’s incentive system performs in its review.
The Arbitrum (ARB) DAO works to improve Ethereum by offering user incentives since it runs Layer-2 scaling solutions on that platform. The approaches shown here did not produce sustainable user retention according to Pink Brain’s research. According to their April 4 report the agency shows that even though promotion brought in new users quickly the network lost them after the campaign ended.
Arbitrum’s Total Value Locked and ARB Price Drop
According to Pink Brains analysis, there are three main performance weaknesses in the Arbitrum DAO: missing active promotion outside ETH, not using essential data tracking properly, and not measuring investment returns well enough. According to the study results, protocols did not know their customer acquisition expenses in 79% of cases because their strategic preparation lacked necessary insights.
“The gains were short-lived. Pink Brains declared that the metrics returned to normal levels right after the Arbitrum promotion ended because its encouragement tactics produced only temporary results. The study found that users’ overall account worth remained unknown because this essential metric allows measuring marketing outcomes accurately.
To reach its funding goals, Pink Brains recommended that the DAO should define specific project success criteria. Our suggestions would let us identify good incentives while showing whether this program makes money for the platform. The proposal from the DAO team intended to enhance monitoring and evaluation methods but failed to receive final approval within the initiative.
In January 2024 Arbitrum initiated a short-term benefit program by presenting 50 million ARB tokens to participating projects. The network began its pilot plan to provide continuous incentives to its growing organization. The total value stored on Arbitrum’s chain dropped even though they developed multiple incentive plans. From December 14, 2024 TVL hit $3.454 billion before declining to $2.422 billion by the end. The ARB token showed a significant price drop of 86.94% when reaching $2.40 in January 2024 before this mark.
According to Pink Brains, they believe the platform needs to make marketing decisions based on hard data and provide better awards to help attract and keep users. It needs to tackle its present problems and improve its business approach to grow sustainably among Layer-2 platforms.