Why Arbitrum’s New Auction Lane Changes the Game
In Brief
Ed Felten discusses Timeboost, a transaction ordering system on Arbitrum, addressing network congestion and latency issues through sealed-bid auctions, improving fairness and efficiency.
In this interview, Ed Felten, Co-Founder and Chief Scientist at Offchain Labs, discusses Timeboost, a new transaction ordering system launched on Arbitrum. Built to tackle issues like front-running, network congestion, and latency races, Timeboost introduces an express lane allocated through sealed-bid auctions.
Ed explains how this approach improves fairness and efficiency without disrupting the experience for everyday users or developers, and shares his thoughts on its broader impact across DeFi, gaming, and decentralized infrastructure.
What is Timeboost, and what problem is it solving within the Arbitrum ecosystem?
Timeboost is an innovative auction-based transaction ordering system designed to enhance fairness and efficiency in blockchain transactions on Arbitrum. The traditional First-Come, First-Serve model reliably protects users from front-running but can lead to issues such as congestion and costly latency races among arbitrageurs to get included first ahead of others.
Timeboost tackles these challenges with an express lane whose control is won through a sealed-bid second-price auction. This retains more value on-chain and reduces the incentive to participate in latency races.
How does Timeboost differ from traditional transaction ordering mechanisms like first-come-first-served or gas auctions?
Timeboost is a modified FCFS ordering policy. In a pure FCFS model, participants seeking faster execution speed attempt to gain an advantage by co-locating near the sequencer or paying for low-latency infrastructure (data-center grade hardware, advanced ISP speed, etc.). Timeboost prevents this by internalizing that competition. The priority is earned through transparent bidding, not physical access.
Timeboost introduces an “express lane” that allows transactions to be included on the chain slightly faster. Once per minute, control of the express lane is auctioned via a sealed-bid auction. The auction winner gets an advantage in extracting arbitrage value. Funds from the auction go to the Arbitrum DAO, with a small share to the Arbitrum Developer Guild.
How does Timeboost affect the average user’s experience on Arbitrum?
For the average user, Timeboost will have a minimal impact. Timeboost preserves Arbitrum’s privacy and protection from front-running while reducing spam and resulting network congestion that affects all users. Non-express lane transactions will be delayed by a nominal 200ms, which means to the average user, their transactions will take approximately 450ms to be sequenced and included into a block (up from approximately 250ms).
What are the implications of Timeboost for dApp developers? Will it change how they design or deploy their smart contracts?
Timeboost doesn’t change how developers write or deploy. Deploying and enabling/disabling Timeboost will not halt or impact the chain, but will instead influence transaction ordering policy. An Arbitrum chain will, by default, fall back to FCFS if Timeboost is deployed but disabled or if there is no express lane controller for a given round.
Are there any specific use cases or verticals (e.g., DeFi, gaming) that will benefit the most from this innovation?
Any vertical where transaction ordering impacts outcomes, DeFi and gaming being two significant examples of that, can be positively impacted by Timeboost. Timeboost should reduce the number of spam transactions submitted by arbitragers, allowing more blockspace for ordinary user transactions.
Have you conducted any benchmarking or simulations showing how Timeboost improves transaction processing or network efficiency?
Timeboost was thoroughly tested by multiple teams and continues to be monitored as its usage increases. We encourage and expect other people to monitor as well.
What’s your broader vision for Timeboost’s role in scaling decentralized systems and markets?
Timeboost is built to stand the test of time. By generating revenue through auction fees, Timeboost can create an additional funding source for the Arbitrum DAO, which can be used to enhance the network, support development, and ensure ongoing improvements to the system.
Timeboost is compatible with decentralized sequencing as well, so it will not hold back Arbitrum’s decentralization roadmap.
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About The Author
Victoria is a writer on a variety of technology topics including Web3.0, AI and cryptocurrencies. Her extensive experience allows her to write insightful articles for the wider audience.
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Victoria is a writer on a variety of technology topics including Web3.0, AI and cryptocurrencies. Her extensive experience allows her to write insightful articles for the wider audience.
