Will Arbitrum’s ‘Timeboost’ revive network activity, help ARB’s price?

• Arbitrum’s new proposal could help improve transaction ordering on the network. 
• Despite potential for improvements, overall activity on the network fell.

Arbitrum [ARB] has been one of the most popular Layer-2 protocols in the DeFi space, having managed to retain its dominance despite multiple new entrants coming into the market.

New developments on the rise

One such development is the proposed adoption of “Timeboost,” a transaction ordering policy. Under the current system, Arbitrum transactions adhere to a first-come, first-served approach.

Timeboost, however, would introduce a bidding system for transaction inclusion and placement.

Users would be able to submit bids for their transactions, with the highest bidders securing faster processing and a more favorable position within the block.

In contrast to the current system, transactions that win the Timeboost auction would be included in an “express lane,” experiencing no delays.

Transactions that don’t participate in the auction would continue to be processed as usual. However, there will be a slight delay of approximately 200 milliseconds.

This mechanism bears similarities to the priority fee system employed on OP Mainnet, where users can pay additional fees to expedite their transactions. Similar to Optimism [OP], the proceeds from the Timeboost auction would be directed towards the Arbitrum DAO treasury, potentially generating a significant revenue stream. With the ability to prioritize transactions, users gain more control over their experience on the Arbitrum network.

Time-sensitive transactions, like arbitrage opportunities or critical DeFi actions, can be expedited through the use of Timeboost. This can lead to a more responsive and user-friendly platform, attracting a wider range of users.

State of Arbitrum

At the time of writing, Arbitrum was having trouble attracting and retaining users. AMBCrypto’s analysis of Token Terminal’s data indicated that the number of active addresses on the Arbitrum network had fallen by 38% over the past month.

However, the revenue generated by Arbitrum remained high.

At press time, ARB was trading at $0.7946 and its price had declined by 3.26% in the last 24 hours. Over the past month, ARB showcased the signs of a bearish trend. It was indicated by lower lows and lower highs exhibited by the price. The network growth around the token also fell significantly, implying that new addresses were losing interest in the token.