Thank you for taking the time to put together a thoughtful response.
Do you happen to hold a view on which lever to pull i.e. per block gas target, L2 minimum base fee, or rate of change factor on the base fee during congestion?
To answer @JoJo question which is tangential, we want to tread very carefully here. The current environment on Arbitrum has currently live dapps happy with their costs, but if we change things too drastically we create an incentive for dapps to seek cheaper alternatives. This could be an orbit chain, but it could also be an OP Stack chain, Cosmos app-specific, or somewhere outside of the Arbtirum ecosystem. This is obviously not an outcome we want.
So this is why we tend to lean toward gradually raising the L2 minimum base fee. It’s been much higher before, leaves room for L1 blob space to get more expensive without hurting users/builders, and is rather simple to implement so we could begin bringing in more revenue rather quickly.
Another option could be to look at multidimensional gas pricing/EIPs being seriously considered by ETH researchers and going for something more novel. But maybe this is a long-term idea?
It’s also worth flagging this proposal, which seeks to loan the Arbitrum Foundation close to half of the DAO’s current ETH holdings to bootstrap the first BoLD validator. Considering we need to pay Proposers 3-4% on their 3600 ETH bond from the treasury each year, and the fact that we are bringing in so little ETH revenue, we don’t currently have a path to sustainably incentivize a decentralized group of validators / challengers.
I do believe L2s are a race to 0 on fees over the long-term, but at that point there should be 100m+ transactions occurring on L2s each day and a slim per transaction margin will result in large revenues. However, if we are handing out 10s of millions of ARB to incentivize activity TODAY, we believe we should be recouping more of that in ETH through transaction fees while we have the luxury of ARB incentives.