USDG, the Paxos-issued stablecoin with roughly $3.09 billion in circulation, launched natively on Arbitrum One, extending the Global Dollar Network to the Ethereum layer-2 network and giving the protocol access to one of DeFi's deepest liquidity pools.

The deployment integrates USDG across decentralized finance protocols including Fluid, Morpho, GMX and Maple, according to an announcement shared with Cointelegraph. Kraken will support deposits and withdrawals, while Stargate will handle transfers between Arbitrum and other networks, including Ethereum mainnet, Solana and X Layer.

What incentives are on the table?

An ArbitrumDAO proposal would commit 100 million ARB tokens to an incentive program aimed at growing USDG liquidity and adoption on the network. The proposal also calls for deploying Arbitrum treasury assets to deepen stablecoin markets, with integrating businesses eligible to apply for support from the Arbitrum Foundation.

As a Global Dollar Network partner, Arbitrum will receive a share of the rewards USDG generates onchain, with proceeds earmarked for ecosystem development rather than direct distributions to ARB holders. Mantle recently joined the same network under a separate announcement, pointing to Paxos's broader rollout across emerging layer-1 and layer-2 venues.

How does USDG fit into Arbitrum's stablecoin mix?

USDG ranks as the seventh-largest stablecoin by market capitalization, according to DeFiLlama data. Most of its supply sits on X Layer, Robinhood Chain and Solana. Arbitrum already holds about $4 billion in stablecoins, per the Arbitrum Foundation, meaning USDG enters a venue long dominated by Circle's USDC and Tether's USDT.

The Arbitrum integration covers the network's core DeFi surface area. Morpho and Maple anchor the lending side, GMX handles perpetuals, and Fluid provides liquidity infrastructure, giving USDG immediate utility across trading, borrowing and collateral markets. With most USDG supply currently concentrated outside Arbitrum, the partnership aims to rebalance distribution toward Ethereum-based liquidity.

Why is Arbitrum targeting tokenization?

The launch lands as Arbitrum repositions for institutional and traditional finance use cases beyond crypto-native trading. Robinhood Chain, built using Arbitrum's technology stack, launched its public mainnet in July after a public testnet debuted in February. The network is designed for tokenized real-world and digital assets, including 24/7 trading, lending markets and perpetual futures exchanges.

Last month, Standard Chartered said Robinhood Chain could materially shift Arbitrum's economics. The bank noted Arbitrum collects 10% of net protocol revenue from companies building on its infrastructure, a revenue-sharing model that could compound as more asset issuers choose the network. Standard Chartered forecast ARB could reach $10 by 2030 — roughly 70 times its price at the time of the report — and projected tokenized assets could reach $4 trillion by the end of 2028.

What happens next?

The ArbitrumDAO vote on the 100 million ARB incentive allocation remains pending as of publication. If approved, the program would channel a meaningful share of the network's unallocated token reserves into USDG liquidity, redirecting emissions from speculative DeFi protocols toward a regulated stablecoin tied to traditional reserve management.