The altcoin sector, particularly within the Arbitrum ecosystem, has witnessed substantial growth with the introduction of the Timeboost transaction prioritization policy in April. Within merely three months, this policy has accrued $2 million in fees. Operating across Arbitrum One and Arbitrum Nova, the mechanism allows users to invisibly bid for priority on an express lane, streamlining transaction processes and easing network congestion. Revenue flows directly into the Arbitrum DAO treasury, reinforcing its financial health.
Transaction Prioritization via Timeboost
The traditional First Come First Served model often led to increased delays and costs due to MEV seekers inundating the network with requests. Timeboost innovates by implementing a second-price auction overseen by a block builder. Here, the highest bidder secures priority, yet only pays an amount equal to the second-highest bid. This system ensures fair valuation while curtailing unnecessary transaction flow.
During peak periods of high-frequency DeFi trading, the application of this mechanism becomes apparent. According to data from Dune, 20-30% of daily decentralized exchange volumes have purchased transaction priority through this system. From late April onwards, hundreds of thousands of transactions have utilized the express lane, with Arbitrum One and the low-cost Arbitrum Nova maintaining seamless block times.
Altcoin Arbitrum Timeboost Mechanism
Experts highlight that the swift resolution of these secret bid formats enables arbitrage bots to focus on instant price opportunities rather than long queues. This enhances liquidity within the Blockchain, fostering a deeper market presence in Arbitrum.
$2 Million Contribution Strengthens Arbitrum DAO
The $2 million garnered through auctions have augmented Arbitrum DAO, which currently holds a treasury of 3.5 billion ARB coins, valued at approximately $1.3 billion. The Blockchain levies Layer-1 fees for data writing to the Ethereum $2,509 mainnet and Layer-2 fees for executing local transactions. Excess revenue is funneled directly into the community treasury, providing a sustainable income model for the Layer-2 network.
However, some developers caution that the rising fee revenue could incentivize centralization of the sequencer’s control. To avoid undermining decentralization principles, the Arbitrum community is expected to clarify a roadmap that distributes the income among diverse network actors and potentially opens the sequencer to multiple operators in the future. Currently, Timeboost effectively reduces network spam and acts as a defense against sandwich attacks.
