We believe this a multi-faceted proposal that represents a significant shift in MEV management and presents a valuable opportunity for Arbitrum.
1. Economic & Technical
The current First-Come First-Serve ordering model is flawed, due to its excessive enablement of MEV Searchers and its failure to capture value. The potential implementation of this proposal would enable the introduction of Timeboost, which allows MEV extraction but in a manner that protects network users and is more efficient at capturing value.
The implementation of this proposal would thus allow Arbitrum to meaningfully innovate on transaction ordering while expanding its set of value-accruing mechanisms.
2. Values, Ethos and Users First
Furthermore, Arbitrum’s long-term goal and premise is to arguably circumvent and build upon the ‘shortcomings and pitfalls’ of Ethereum, where maximally extractive activities like sandwich trades and frontrunning profoundly harm and impede user experience.
The implementation of this proposal is aligned with the core values of Arbitrum while solving an important pitfall in the user experience of many crypto users.
3. Value-accrual and Distribution
Although exact revenue estimates are challenging, Timeboost is expected to become another revenue-generating source for Arbitrum without compromising user experience. That is undoubtedly another great step forward which enhances Arbitrum’s long-term sustainability and viability.
How the newly captured and accrued value is distributed, is a nuanced topic that may require a separate vote, due to the sheer amount of inputs and debates that typically surround value-distributing mechanism proposals (buyback & burn, rev-share to all ARB holders vs. to ARB stakers, distributing ARB vs. ETH, etc.).
Individuals may agree with and be in favour of the implementation and adoption of Timeboost, but may not necessarily agree with and be in favour of any of the proposed value-distributing mechanisms.
In the context of the current options proposed, we find Option 1 (collect ETH) to be the superior option.
At this point in time, the token ‘burning’ mechanism has been sufficiently time and battle-tested. There have been various implementations of this mechanism across the industry. Yet, according to the existing data (both internal and external) today, it is clear that from a purely economic perspective, none of its implementations tend to fundamentally and efficiently drive value to the underlying token.
From a legal/regulatory perspective, the ‘buyback and burn’ mechanisms have been deemed a more ‘compliant’ and viable solution, which is a common reason why many protocols and initiatives still decide to adopt this approach, despite its subpar economic performance.
However, the legal and regulatory landscapes are continuously evolving and changing, while the fundamentals and economics do not. That is why we find Option 1 (collect ETH) to be a superior option.
Additionally, besides the pure assessment of the proposal itself, Express Lane appears to be greatly similar to Fast Lane on Polygon and hence it could be efficient and worthwhile for the two teams to connect and collaborate.