Arbitrum One batches users' transactions and submits them to Ethereum, paying a share of the transaction fees to Ethereum validators (expense).

Arbitrum One is an L2 smart contract platform for decentralized applications on Ethereum. Arbitrum was founded by Offchain Labs and launched in 2021.

ARB tokenholders own and govern the protocol. They currently run the only sequencer and take a cut of the total transaction fees paid by users (revenue). Arbitrum’s investors include Polychain, Alameda Research, Coinbase Ventures, etc.

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Arbitrum One

# Arbitrum One Fees Methodology

## 1. Overview

The total value paid by users to transact and participate in the Arbitrum One ecosystem is measured by the Fees metric. Included in this metric are native L2 transaction gas fees, auction fees from the Timeboost transaction ordering protocol, and license fees generated through the Arbitrum Expansion Program. The total economic value generated by the network is represented by these fee components, which are denominated in Ether and converted to USD.

## 2. Data sources

- **Blockchain events**: Native transaction execution data and `AuctionResolved` events from `ExpressLaneAuction` contracts on Arbitrum, as well as native account flow records on Robinhood Chain, covering Arbitrum, Robinhood Chain, and Ethereum
- **External data**: End-of-day price feeds for native gas assets

## 3. Step-by-step calculation

### Component A: L2 gas fee extraction

- **Purpose**: Capture native transaction gas fees paid by users on Arbitrum One
- **Logic**: Native transaction execution data is parsed to extract the gas used and the effective gas price for each transaction. The transaction fee is calculated by multiplying the gas used by the effective gas price, and the resulting amount is normalized by decimal precision to determine the fee paid in Ether.
- **Key fields**: `receipt_gas_used` and `receipt_effective_gas_price`

### Component B: Timeboost auction fee extraction

- **Purpose**: Capture fees paid by participants in Timeboost transaction ordering auctions
- **Logic**: `AuctionResolved` events from `ExpressLaneAuction` contracts are parsed to extract the auction resolution price. This price is normalized by decimal precision to determine the fee paid in Ether.
- **Key fields**: `price`

### Component C: Arbitrum Expansion Program license fee extraction

- **Purpose**: Capture license fees generated from participating chains in the Arbitrum Expansion Program
- **Logic**: Native token flows are tracked for specific reward distributor accounts on Robinhood Chain. Net fee-account inflows are calculated by subtracting refund outflows from fee inflows. The license fee is then calculated by applying a predefined fee rate to the net inflow, representing the licensed share of the fees earned.
- **Key fields**: `account_address`, `category`, and `value`

### Component D: Aggregation and USD conversion

- **Purpose**: Combine all fee components and normalize them to USD
- **Logic**: Daily fee amounts from L2 gas fees, Timeboost auctions, and the Arbitrum Expansion Program are aggregated by day, chain, and asset. These aggregated amounts are multiplied by end-of-day asset prices to convert the values to USD. A zero-filling strategy is applied to ensure continuity across daily intervals.
- **Key fields**: `timestamp` and `price_usd`

*This methodology was automatically generated by Token Terminal's methodology analyzer.*

Total value users pay to use a protocol (gross fees, user-paid fees).

Arbitrum OneARB

Fees

Fees

Competitive landscape

Chain breakdown