With the introduction of the Timeboost mechanism in April 2023, the Arbitrum ecosystem has witnessed remarkable growth, achieving $2 million in revenue within three months.
Transaction Prioritization via Timeboost
Timeboost introduces an innovative transaction prioritization strategy, allowing users to invisibly bid for priority on an express lane. This system operates as a second-price auction, where the highest bidder secures priority but pays only an amount equal to the second-highest bid.
Impact on Arbitrage and Liquidity
According to data from Dune, 20-30% of daily decentralized exchange volumes have utilized this mechanism to purchase transaction priority. This allows arbitrage bots to focus on instant price opportunities, enhancing liquidity within the Arbitrum blockchain.
$2 Million Strengthens Arbitrum DAO
$2 million garnered through auctions have boosted Arbitrum DAO's treasury, which currently holds 3.5 billion ARB coins valued at approximately $1.3 billion. Excess revenues are funneled directly into the community treasury, providing a sustainable income model for this network infrastructure.
The implementation of the Timeboost mechanism not only contributes to increased revenue for the DAO but also enhances liquidity, strengthening Arbitrum's market position.
