Since its launch 16 weeks ago, Timeboost has accounted for nearly 50% of Arbitrum DAO's revenue. --- What is Timeboost? It's an optional fast lane you can pay for that gives your transaction about a 200ms head start. How it works: Users bid in sealed auctions to get their txs live before others. Benefits: Reduces network spam and captures MEV value for the chain rather than off-chain searchers. Impact: Generated almost $3M revenue in slightly more than 3 months; applicable to other chains. --- Revenue So Far Timeboost generated $2.79M in fees over its first 16 weeks. As @DefiLlama shows, that's $10.5M annualised. These go directly to the Arbitrum DAO. Moreover, as shown in a detailed dashboard from @EntropyAdvisors that you can check on @Dune, this number accounts for approximately 50% of Arbitrum's total revenue (44.4% in the last month), just overtaken by the sheer volume of transaction fees. Dune Dashboard was done by @0x___Brick and @tomwanhh. Link in the image description. --- The Whole Story First and foremost, @arbitrum has private mempools. Unlike networks like Ethereum and Bitcoin, no one can view the order of transactions before they are confirmed on the chain. Consequently, the potential MEV of third-party actors is also lowered. Still, @OffchainLabs (the development team behind Arbitrum) implemented this mechanism to give users the ability to put their transactions on top of others', by paying more fees. Furthermore, it is interesting to note how these auctions are legal and transparent, while actual MEV's ethical (and legal) correctness remains debated. The cohorts that mostly utilise Timeboost are arbitrageurs & MEV searchers, high-frequency traders, liquidators, and market makers/protocols to conduct MEV transparently. --- Deeper Dive on How Timeboost Works 1. Express Lane & Auction System Every 60 seconds, users have the opportunity to bid on an auction to advance their transaction, allowing it to enter the Express Lane first. Why every 60 seconds? Cause 10s or sub-second auctions would probably: - Increase complexity & gas costs - Reduce auction quality 2. Bidding Token Bids can be made in any ERC-20 token; For Arbitrum One and Nova, the default bidding token is WETH. 3. Timing and Delays Normal (non-express-lane) transactions face a default 200ms artificial delay before sequencing (which was not present before Timeboost introduction). Instead, block times remain at ~250ms, so finality for regular Txs extends to ~450ms (~250ms + 200ms). Express-lane transactions bypass this delay. 4. Sequencer Handling & Fairness Entering the express lane does not allow the user to reorder transactions, view the mempool, or guarantee absolute front-running dominance. In practice, the user can bid a price to get their tx live faster, but they are not guaranteed that it will be accepted because they cannot see the mempool and therefore cannot see the other bids. 5. Economic Cost Let's say the user with the highest bid paid 0.1 WETH, while the second-highest bid paid 0.05 WETH. The winning bidder will only pay 0.05 WETH. This was thought to encourage honest bidding and disincentivize overpaying for priority. --- Isn't the 200ms delay terrible UX? While this may slow down highly specialized actions like CLOBs and high-frequency trading, for the vast majority of users this delay doesn't make a real difference. In fact, our brain only begins to discern visual stimuli within about 100ms and 200ms. Therefore, Timeboost doesn't impact our perception of using the chain. --- Do other chains use similar technology? Although several chains allow end users to choose their own gas to speed up their transactions, none have yet implemented a similar auction mechanism. However, as specified by the OffChain Labs developers, Timeboost could also be implemented on other chains, while also being compatible with the future Arbitrum implementation of a decentralized sequencer. --- PS: If you're a nerd, check out the original academic paper: "Buying Time: Latency Racing vs. Bidding in Transaction Ordering"

7/ Projects like @yearnfi and @GMX_IO are making DeFi more accessible. Yearn pioneered yield aggregation, automating strategies across protocols, while GMX brings leveraged trading onchain.

Dragonfly invested into PepperSec, Inc., the developers of Tornado Cash, in August of 2020. We made this investment because we believe in the importance of open-source privacy-preserving technology. Prior to our investment, we obtained an outside legal opinion that confirmed that Tornado Cash as built complied with the law, under the guidance given by FinCEN in 2019. The government has now stated in open court that they are contemplating charges against Dragonfly for having invested into the Tornado Cash team in 2020. On counsel’s advice, we have refrained from public comment. But we can no longer remain silent. We believe deeply in Americans’ right to privacy, and the lack of it remains one of crypto’s largest unsolved problems. We therefore stand by our investment. We did not operate or exercise any control over Tornado Cash, we had no contact with any malicious users, we always encouraged our portfolio companies to follow the law, and we maintain that Tornado Cash itself has a lawful right to exist—a view reinforced by Van Loon v. Department of the Treasury and OFAC’s subsequent rescission of sanctions. Charging a venture firm for a portfolio company’s alleged misconduct would be unprecedented, especially under these circumstances. In 2023 we received a DOJ subpoena and have fully cooperated with the government’s investigation of Tornado Cash, confident that we have always complied with the law. The DOJ has made clear that we are not ourselves a target of their investigation. As with every investment, we provided PepperSec the same advice and support we offer all portfolio companies. We believe the government’s statement in court today was primarily to undermine a defense of Tornado Cash—to make it more difficult for the defense to call Tom to testify on the stand. After all of this time—years later—bringing charges against Dragonfly would be outrageous, contrary to the facts and the law, and would induce a chilling effect onto all investment into crypto and privacy-preserving technologies in America. We don’t believe the DOJ would actually bring such absurd and groundless charges. But if they do, we intend to vigorously defend ourselves.

Rebooting

Rebooting

Arbitrum Everywhere. Entropy Everywhere.

Rebooting

Rebooting

In November, the entire Ethereum ecosystem will convene in Buenos Aires. However, it would be a shame if we went there only to have the same self-focused discussions with the same folks we’ve seen in Berlin, Cannes, Denver, etc. Times have changed. The technology is ready, and we need to aim for mainstream adoption. We must use crypto conferences as opportunities to reach beyond our circles. We must present and explain Ethereum to the masses and help them bridge the gap to build on crypto. We at L2BEAT Governance Team (@l2beatgov) were brainstorming recently on how we can help bridge that gap. We have some ideas. Stay tuned and feel free to reach out to me if you want to help. We're cooking! Come cook with us!

Esto fue SEED Org. All Hands 🙌 Un repaso por el camino que nos ha traido hasta acá y hermosas vistas a todo lo que se viene en el horizonte, especialmente en esta previa road to @EFDevcon 🚀 Felicidades team @SEEDNodes @SEEDGov 👏 🫡 Seguimos construyendo para ud!