The Arbitrum Decentralized Autonomous Organization (DAO) is thinking about creating a $3.3 million fund for memecoins to support a memecoin-friendly environment on the Ethereum layer-2 blockchain network, as stated in a proposal on March 24 on the platform’s forum.

The proposal's aim is to help the entire Arbitrum ecosystem by attracting attention, new users, increasing chain usage, boosting DeFi activities and more.

The author made the proposal as a response to new DeFi incentives which they believe only benefit large players. They suggested that the DAO should stop focusing on DeFi protocols and rather focus on bringing in new participants who would eventually use the DeFi protocols.

Arbitrum is the biggest Ethereum-based layer-2 network, controlling over 40% of the market with assets worth $16.84 billion locked on the network according to L2Beats data.

The proposal outlined the governance structure of the memecoin fund, with five board members and three collaborators operating through a 5/9 multi-signature scheme. Board members and collaborators would be prohibited from investing in tokens supported by the fund.

Criteria for selecting memecoins were also identified in the proposal, including secure contracts, widespread holders, minimal whale holdings, liquidity, and a minimum market capitalization of $1 million.

The $3.3 million funding will cover expenses such as monthly compensation for board members, collaborators, and graphic designers. This funding also includes an initial allocation of $3 million in ARB to start the fund for the first six months.

The proposed timeline indicates a swift launch for the fund, followed by a six-month promotional period, allowing for a reassessment after this time. The Arbitrum DAO will be able to vote on increasing funding or terminating the memecoin fund. In the case of dissolution, assets will be converted into the ARB token and returned to the Arbitrum DAO.

The proposal from the Arbitrum Foundation aligns with the current popularity of memecoins in the crypto industry, which have been driving network activity on various platforms such as Solana and the Base network.

Recently, the Avalanche Foundation acquired five memecoins as part of its Culture Catalyst program to encourage broader blockchain adoption.