Hey everyone, here is a compilation of some FAQs that we’ve gathered from the DAO and relevant stakeholders.
Feel free to tag us if there are questions that are not covered in this FAQ document, and we will respond and add on to the list accordingly.
We voted to collect bids in ETH.
Reasoning:
Treasury Diversification
Arbitrum DAO’s ETH holdings are tiny relative to its ARB holdings. Adding to that in any and all ways possible is just a generally good idea.
Optionality of MEV share
There’s a recent movement towards applications collecting MEV, including discussion in this thread. Collecting bids in ETH allows for some MEV “profit-share” with apps if that is decided in the future, whereas buying and burning ARB does not.
Questionable Value Accrual of Buy and Burn
MakerDAO tried Buy and Burn but value accrual was questionable and it wasnt a good narrative with the market. Staking is a better mechanism for value accrual which aligns long term holders with the protocol, rather than giving value to every token holder indiscriminantly like burning does, and gives more freedom over the precise way value accrues to the token, and also is just a better narrative as shown by LSD market share.
Confirming my previous take, I am voting for collecting the fees in eth.
While the buyback and burn would create some sort of upward pressure, this will be dwarfed by the unlocks; considering we are on track to also approve the arb staking proposal, to me it makes more sense, for now, to just collect everything in eth.
I can also see the dao going back to this decision after a few years to reasses.
Agreed, this proposal is very well planned, lays out a complete plan, steps for implementation, and the community feels it is very reasonable
I am voting in favor of this proposal on Snapshot.
Thank you very much for the proposal and for all the work in developing Time Boost. I believe MEV capture is beneficial as long as it doesn’t affect the user experience or their economic interests, and it provides the DAO with an additional source of revenue beyond the usual fees.
That said, MEV capture is still a topic whose legal implications remain somewhat unclear. There is no clear regulatory outlook, nor a solid stance from various jurisdictions on this matter.
This is why I find @chaoslabs analysis of potential risks crucial, particularly the possibility of capturing MEV derived from sandwich attacks on users during the liquidation of their positions.
I would like to know if the Foundation or the OCL team has a reporting roadmap or if they are considering hiring a service provider for this purpose. These reports could be funded with the new revenue generated by Time Boost.
Regarding this, like many other delegates, I lean toward capturing the gains in ETH. This will strengthen the DAO’s treasury with the most important and valuable asset in the Ethereum ecosystem. I’m also not a big fan of burn initiatives, as past experiences have shown they don’t have the short-term impact people expect (i.e., price increases). Market dynamics and asset prices depend on multiple factors, and such measures usually fail to deliver the desired outcome.
Linking our risk analysis of Timeboost here for anyone interested.
The Timeboost proposal should it offers a sustainable way for ArbitrumDAO to generate additional revenue without compromising user experience or security. With the implemention of an auction-based system for express transaction lanes, Timeboost will ensure that MEV ops can be captured by the DAO rather than by private searchers alone.
When it comes to the options to collect bids in either ETH or ARB we are in favor of ETH. This diversifies away more dependence of the DAO on ARB and should decrease risks. Overall, Timeboost balances offer a robust, permissionless system that aligns with the ethos of the DAO.
Quick note for everyone here: we just published an analysis of Timeboost vs other MEV solutions for L2s as a part of our engagement with the DAO via the ARDC. Linking it below.
Just cast my vote in favor of collecting bids in ETH for the treasury. I see this as a stronger long-term move for the DAO, securing funds for development and ecosystem growth. Don’t think it’s the right time to tinker with ARB’s inflation/dilution. Definitely interested to see how the testing phase plays out before full implementation.
I voted Collect bids in ARB and burn because we need to curb ARB inflation.
I voted to collect bids in ETH and send to treasury on the temp check proposal.
Timeboost is an innovative approach to transaction ordering that creates a more efficient market and internalizes surplus value for the Arbitrum DAO. It’s a clear win for the Arbitrum ecosystem as whole relative to the current first-come-first-served system. I’m comfortable with Offchain Lab’s development approach from a security perspective.
I prefer collecting the fees in ETH because it creates a natural treasury diversification mechanism while preserving decentralization.
The FranklinDAO/Penn Blockchain Team has voted for the option of collect fees in ETH. We believe that more discussion is needed on where Timeboost fees should be distributed - whether to ARB stakers, applications that created the MEV opportunity, burned, or a mix of these options. Further, 3.7B ARB tokens (or 37% of total supply) have yet to be unlocked, with vesting to Investors/Team & Advisors continuing linearly until March 2027 (link). A later discussion is needed to decide when the right time is for an ARB burn mechanism. In the meantime, we believe growing the DAO’s ETH reserves is a good idea.
A couple things we wanted to mention/ask:
What is the expected revenue Timeboost will bring to the DAO? What is a ballpark number to give delegates a general idea of the revenue opportunity here? @arbitrum A paper quantifying MEV claimed $250k of MEV profit was extracted in the 1.5 year period on Arbitrum (From Arb mainnet launch Aug 2021 to Mar 2023). How much larger is the opportunity now?
Wanted to clarify what winning the Express Lane auction means - Since auctions are every minute, does this mean that the auction winner will have first in block bundle guarantee for an entire 1 minute period - meaning for the next 240 blocks? (1 min * 60 sec * 1000ms per sec / 250ms/block)
Express Lane gives rise to new toxic MEV opportunities at the expense of users/protocols. @chaoslabs explained this in their analysis, citing the example of an Express Lane auction winner identifying a close to liquidation position and sandwiching it to forcibly create a liquidation. It’s important to note that these opportunities exist in any transaction order scheme that allows for top of block bundled tx inclusion. We’d like to see more historical analysis on the size and frequency of these user/protocol hurting MEV bundles, and what we can expect to see in Timeboost.
I fully support the adoption of Timeboost and voted for the option to collect bids in ETH. This will allow an increased efficency and user experience. Concerning the option, collecting fees in ETH makes more sense to me, even after reading the different perspectives on the forum.
Voted for collecting bids in ETH to the treasury: Timeboost sounds like a great way to eliminate spam transactions. Also, it will generate revenue for the Arbitrum DAO. The whole proposal sounds like a great innovation in this space. I also like that the tech can be picked up by Orbit chain (Layer 3). Many of them could give their native tokens extra utility with this—another reason for builders to build on Orbit. I did spend some time thinking about whether bids should be done in ETH or ARB. I decided to collect bids in ETH because we have passed the ARB staking proposal, and I’m excited to see how that would work. Also, it’s great that we can change it to collect bids in ARB anytime. It might be interesting to test this out sometime in the future.
The following reflects the views of L2BEAT’s governance team, composed of @krst and @Sinkas, and it’s based on the combined research, fact-checking, and ideation of the two.
We’re voting FOR this proposal and opting for bids to be collected in ETH in the treasury.
After reviewing the proposal, reading ARDC’s comparison of Timeboost to other transaction ordering policies, and ARDC’s risk analysis of Timeboost, we are supportive of its adoption on Arbitrum.
Collecting bids in ETH and letting it accumulate in the treasury is a more sensible approach. However, we’re also generally supportive of ARB buybacks and burns in a more general context, and perhaps we could see another proposal in the DAO to do that, utilizing the ETH in the treasury at a later date.
Having ETH enables the DAO to have more options that could bolster ARB’s utilitiy, including that of buying ARB from the market to burn it. If we directly collect bids in ARB and burn them, we limit our options from the start. Apart from burning ARB, mitigating against inflation and token unlocks could also be achieved through other means, such as Tally’s recently approved staking proposal.
Lastly, similar to other technical proposals we’ve had in the past, we’ll verify the executable of the proposal once it goes onchain before casting our vote.
Completely agree. ETH is the more cautionary approach imo.
On behalf of the UADP, we think adopting the Timeboost as the new transaction ordering policy brings many advantages for the network’s long-term health.
Some benefits we were sold on:
We chose ETH as it was the most logical in our opinion, there should be more inflows to the DAO in ETH and we think there’s a true case or arguement to make this be the defacto type of inbound token.
OpenZeppelin, the Security Member of the ARDC, reviewed the proposal to adopt Timeboost for security and implementation risks. We found no security issues with the proposed design at this time.
There is no code or decentralized version today, but community approval would grant Offchain Labs and Espresso Systems the runway to develop those things. Those details are where most of our security concerns will be so we look forward to reviewing their work when it’s available.
More on our Security Analysis here:
I have been asked this question by some members which you may want to answer and add it in the FAQ
The following reflects the views of the Lampros Labs DAO governance team, composed of @Blueweb, @Euphoria, and Hirangi Pandya (@Nyx), based on our combined research, analysis, and ideation.
We are voting FOR this proposal with the option to collect bids in ETH to the treasury.
We believe this is a well-researched and well-thought-out proposal that can only be properly evaluated through real-world data. Timeboost offers a unique way for ArbitrumDAO to capture value from MEV activity while having a minimal effect on regular users.
We believe that generating revenue should be a key focus for the DAO’s long-term sustainability, and Timeboost provides a good mechanism for this. Collecting bids in ETH keeps future options open, unlike burning ARB tokens. Once we have real-world data, we will be better positioned to decide how to handle the revenue, whether through distribution or token burning.