Deep Dive
1. ArbOS 40 “Callisto” Upgrade (24 May 2025)
Overview:
This major protocol upgrade aligned Arbitrum One/Nova with Ethereum’s Pectra update, introducing native account abstraction and cryptographic enhancements.
Key features:
- EIP-7702: Allows externally owned accounts (EOAs) to act as smart contracts temporarily, enabling gas payments in any token and multi-signature wallets.
- EIP-2537: Adds BLS signature verification for zero-knowledge proofs and cross-chain interoperability.
- Stylus VM Fix: Resolved caching issues for non-existent contracts, improving developer predictability.
What this means:
This is bullish for ARB because it streamlines user onboarding (e.g., social recovery wallets) and strengthens developer tools. Enhanced Ethereum compatibility ensures Arbitrum remains a leading Layer 2 as the ecosystem evolves.
(Source)
2. Timeboost Transaction Policy (April 2025)
Overview:
A sealed-bid auction system replaced the first-come-first-served model for transaction ordering, capturing MEV revenue for the DAO treasury.
Key mechanics:
- Express Lane: Users bid ARB/ETH for 200ms priority access.
- Revenue: Generated $2M+ in fees by July 2025, with 97% directed to the DAO.
- Spam Reduction: Cut Sequencer load from 150K+ websocket connections to manageable levels.
What this means:
This is neutral for ARB in the short term—while it monetizes MEV, some community concerns about centralization persist. However, it improves network efficiency and funds ecosystem growth.
(Source)
3. $14M Audit Program (28 July 2025)
Overview:
A 30M ARB grant program subsidizes third-party audits for early-stage projects, partnering with firms like OpenZeppelin and Certora.
Key details:
- Eligibility: Projects building on Arbitrum with high-growth potential.
- Impact: Reduces audit costs by ~50%, accelerating secure deployments.
- Oversight: Managed by a committee including DAO-elected experts.
What this means:
This is bullish for ARB as it lowers barriers for quality dApps, attracting developers and reinforcing Arbitrum’s reputation as a secure L2.
(Source)
Conclusion
Arbitrum’s codebase updates reflect a focus on Ethereum synergy, user experience, and ecosystem security. The Callisto upgrade and Timeboost policy highlight technical innovation, while the audit program addresses long-term sustainability. As adoption grows, how will these changes influence Arbitrum’s position in the L2 “chain wars”?