Logo
ScienceStack
Table of Contents
Fetching ...
Sign In

TimeBoost: Do Ahead-of-Time Auctions Work?

Akaki Mamageishvili, Christoph Schlegel, Ko Sunghun, Jinsuk Park, Ali Taslimi

TL;DR

The paper evaluates TimeBoost, an Ahead-of-Time auction for blockchain transaction ordering, by comparing fast-lane markouts to bids to measure how well bids predict future arbitrage value. Using Arbitrum data from August 2025, it finds bids and minute-level markouts are only weakly correlated, though correlations strengthen over longer horizons due to variance and mean-reversion effects. The analysis situates TimeBoost within a common-value auction framework and demonstrates that longer evaluation windows yield clearer predictive signals, while immediate one-minute profits remain highly volatile. The findings suggest that AOT slot auctions face prediction and efficiency challenges, with implications for block-building market design and future empirical scrutiny of broader liquidity and non-arbitrage use of fast lanes.

Abstract

We study the performance of the TimeBoost auction, by comparing cumulative fixed time markout of fast lane trades over the TimeBoost interval to bids for the fast lane. Such comparison allows us to assess how well bids predict future extracted value from the time advantage. The correlation between winning bids and markouts is weak across bidders, suggesting that bids are a noisy predictor of extracted value. The correlation slightly improves when comparing paid bids (the second highest bid) instead of winning bids to markouts, which we attribute to the fact that the auction is more of a common value type. In all settings, the relative order of the most frequent bidder performance remains the same, together with their absolute profits. Bids and markouts aggregated over long time intervals exhibit much higher correlation, indicating that bidders detect trends much better than identify when the high arbitrage value is exactly available. One possible explanation for this is the fact that the correlation between previous minute markouts and current minute bids is significant, suggesting that the previous minute markouts is used to predict the next minute value when bidding.

TimeBoost: Do Ahead-of-Time Auctions Work?

TL;DR

The paper evaluates TimeBoost, an Ahead-of-Time auction for blockchain transaction ordering, by comparing fast-lane markouts to bids to measure how well bids predict future arbitrage value. Using Arbitrum data from August 2025, it finds bids and minute-level markouts are only weakly correlated, though correlations strengthen over longer horizons due to variance and mean-reversion effects. The analysis situates TimeBoost within a common-value auction framework and demonstrates that longer evaluation windows yield clearer predictive signals, while immediate one-minute profits remain highly volatile. The findings suggest that AOT slot auctions face prediction and efficiency challenges, with implications for block-building market design and future empirical scrutiny of broader liquidity and non-arbitrage use of fast lanes.

Abstract

We study the performance of the TimeBoost auction, by comparing cumulative fixed time markout of fast lane trades over the TimeBoost interval to bids for the fast lane. Such comparison allows us to assess how well bids predict future extracted value from the time advantage. The correlation between winning bids and markouts is weak across bidders, suggesting that bids are a noisy predictor of extracted value. The correlation slightly improves when comparing paid bids (the second highest bid) instead of winning bids to markouts, which we attribute to the fact that the auction is more of a common value type. In all settings, the relative order of the most frequent bidder performance remains the same, together with their absolute profits. Bids and markouts aggregated over long time intervals exhibit much higher correlation, indicating that bidders detect trends much better than identify when the high arbitrage value is exactly available. One possible explanation for this is the fact that the correlation between previous minute markouts and current minute bids is significant, suggesting that the previous minute markouts is used to predict the next minute value when bidding.

Paper Structure

This paper contains 14 sections, 3 equations, 3 figures, 1 table.

Table of Contents

  1. Introduction
  2. Related Work
  3. TimeBoost
  4. Empirical Approach
  5. Empirical Findings
  6. Theoretical Predictions
  7. Common Value Second Price Auctions
  8. Arbitrage Value and Price Volatility
  9. Methodology
  10. Exchanges and Data
  11. Markouts and Profits
  12. Empirical Results
  13. Profits, Price Volatility and Bids
  14. Conclusions and Future Work

Figures (3)

  • Figure 1: Price Volatility
  • Figure 2: Arbitrage Profits
  • Figure 3: Autocorrelation of paid bid and of markouts per minute