Hey @dvrij – good topic.
Arc at its genesis was an exciting product, targeting institutions and larger borrowers.
There were a few intriguing proposals too:
https://governance.aave.com/t/arc-continue-liquidity-mining-program-on-aave-v2-ethereum-market-and-introduce-liquidity-mining-on-aave-arc-market/7189
https://governance.aave.com/t/arc-adding-multi-collateral-dai-to-the-aave-arc-market/6806
It was additionally one of the reasons we shifted away from ARC → ARFC in Governance: to lead to less confusion. IMO, what happened to Arc also happened to a majority of crypto products.
Rates were raised, directly impacting risk assets.
Institutions who were curious were told to refocus — and exploits and hacks errored faith in on-chain products. All of this is to say Arc had a lot of headwinds.
In the meantime, Coinbase and others have developed cleaner on-ramps targeting institutions.
More outreach, more support, and a powerful marketing channel.
If Aave wants to grow this market we need to re-invest in business development. The community has signaled a preference for growing other Aave products (V3, GHO) over Arc in the interim.