Economic efficiency of Arbitrum’s Timeboost

Determine the broader economic efficiency of Arbitrum’s Timeboost auction-based express lane transaction ordering mechanism, including how secondary markets for reselling express lane rights affect efficiency, speculative behavior, concentration of control, and the incidence of reverted transactions and spam.

Background

Arbitrum’s Timeboost replaces first-come-first-served ordering with a sealed-bid second-price auction that grants short-term express lane access to a winning controller. The paper documents centralization of control, high revert rates, and mixed impacts on MEV extraction and fairness.

The authors note that express lane rights are valuable and have been resold via intermediaries, creating secondary markets whose net effect on efficiency is unclear. These markets may increase efficiency by reallocating access to those who value it most, but could also amplify speculation, concentration, and spam through poorly validated bundles.