Arbitrum’s Timeboost goes live, generates $2,491 in DAO revenue on day 1

Timeboost overhauls the chain’s first come, first serve policy with market mechanisms

article-image

Arbitrum/Logo Majesty and Shutterstock modified by Blockworks

share

This is a segment from the 0xResearch newsletter. To read full editions, subscribe.


More than a year after its initial announcement, Arbitrum launched Timeboost yesterday.

Timeboost is a new way of ordering transactions on Arbitrum. That seems pretty boring and unexciting on the surface, but hopefully we can show you why it’s a pretty big deal.

Transactions today on Arbitrum are ordered on a simple first come, first serve (FCFS) basis. Seems fair! But it’s problematic in practice:

  • Financial systems need a way to efficiently process transactions. When markets crash, a lending application like Aave needs a way to quickly liquidate pledged collateral before prices plummet further.
  • Since transactions are cheap and not regulated by prices due to the FCFS mechanism, MEV searchers repeatedly spam the network to increase their chances of transaction inclusion. This degrades the overall network user experience.

Think Uber without surge pricing. Sounds fair, but then everyone — regardless of their priority — would be calling for cabs, and a pregnant woman in labor who needs to get to the hospital asap struggles to get a ride.

Timeboost tries to mitigate this problem by introducing an auction where MEV searchers can bid for transaction priority. The winner of the auction gets their transaction fast-tracked in an “express lane.” 

This is roughly how it works:

  1. Tony and Janice are MEV searchers. 
  2. Both compete for priority inclusion — Tony pays 1 ETH and Janice pays 2 ETH in the auction.
  3. Neither knows how much the other is bidding because transactions sit in a private mempool. 
  4. Janice wins the auction and pays the price of Tony’s bid (1 ETH).
  5. Tony’s transaction is delayed by 200ms while Janice’s transaction receives immediate inclusion in the express lane. Hence the name: Timeboost.

Timeboost in effect introduces an optional market pricing mechanism into its fee market. It’s similar to what EIP-1559 and Flashbots’ MEV-Boost software does for the Ethereum L1, FastLane does for Polygon, and what Priority Gas Auction does for Optimism.

Timeboost is generally perceived as bullish because it creates value accrual for the ARB token by taking it back from MEV searchers.

How much are we talking? About a $30m opportunity for ARB stakers, Entropy Advisors estimates. Arbitrum MEV searchers extracted an estimated $29.3m in March alone.

After a mere one day of being live, Timeboost has generated $2492 in DAO revenue.

Source: Dune

OK, so Timeboost is great. But there are broader complaints.

Some worry that the ability to monetize sequencer revenue means a shrinking incentive for Arbitrum to decentralize the sequencer. Max Resnick, for instance, has previously made that argument on the Bankless podcast.

Personally, I think the hand-wringing around centralized sequencers is somewhat overblown. Recall back in January how users were able to bypass sequencer-level censorship on the Soneium chain by triggering a forced transaction inclusion on the L1. Sequencer centralization is a problem, but it’s not quite as important as, say, having fraud proofs.

Yet, Arbitrum has plans to make Timeboost compatible with decentralized sequencing. It’s all part of the roadmap, Offchain Labs CEO Steven Goldfeder told me at ETHDenver.

The complexity of Timeboost’s design and making it eventually compatible with a decentralized sequencer set was part of the reason the launch was delayed, Arbitrum CTO Harry Kalodner told Blockworks.

A September 2024 blog points to Arbitrum’s collaboration with Espresso to create a decentralized Timeboost. Rollups using Timeboost would be able to auction off the right to sequence blocks on the Espresso marketplace (see the formal specs here).

That’s essentially an auction (Timeboost) inside of an auction (Espresso) inside of an auction (L1 settlement). But hey, at least everything is decentralized.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research Report Templates.jpg

Research

Figure, founded by former SoFi CEO Mike Cagney, has emerged as a leader in onchain RWAs, with ~$17.5B publicly tokenized. The platform’s ecosystem volume is growing ~40% YoY as it expands beyond HELOCs into student loans, DSCR loans, unsecured loans, bankruptcy claims, and more. Operationally, Figure cuts average loan production cost by ~93% and compresses median funding time from ~42 days to ~10, creating a durable speed-and-cost advantage.

article-image

Combining Franklin Templeton’s tokenization expertise with Binance’s trading infrastructure could speed crypto adoption, companies say

article-image

The firm’s upcoming filing comes as competition heats up over the USDH stablecoin

article-image

Robinhood and Coinbase are vying for user attention with new social features that could rival Twitter

article-image

Atkins backs predictable digital asset framework through Project Crypto, marking a departure from prior enforcement tactics

by Blockworks /
article-image

Following a roundtable, the startup emerges as frontrunner, despite entries from Paxos, Ethena, and others