Just-in-Time Resale in an Ahead-of-Time Auction: An Event Study
Burak \"Oz, Christoph Schlegel, Akaki Mamageishvili

TL;DR
This paper analyzes how a just-in-time secondary market impacts primary auction dynamics in Arbitrum's Timeboost mechanism, revealing reduced competition and value capture post-adoption of Kairos.
Contribution
It provides the first empirical analysis of how secondary-market emergence affects ahead-of-time primary auctions in blockchain systems.
Findings
Primary auction competition declines significantly after Timeboost adoption.
Paid bids in primary auctions drop to 14.8% of the highest bid post-Kairos.
Total profit-and-loss remains similar despite changes in bid shares.
Abstract
We study Arbitrum's Timeboost mechanism following the adoption of Kairos by its main users -- Wintermute and Selini Capital -- to understand how the emergence of a just-in-time secondary market affects the dynamics of an ahead-of-time primary auction. We find that competition in the primary auction declines significantly and that Arbitrum captures a smaller share of the value generated around Timeboost. After the transition, paid bids in the primary auction correspond to only 14.8\% of the highest bid (compared with nearly 62.7\% in the \textit{Pre-Kairos} era) and to a smaller share of searcher profit-and-loss (PnL), even though total PnL remains of similar magnitude across regimes. While the exact distribution of the remaining surplus between searchers and Kairos remains unclear, the evidence suggests that a substantial share is no longer captured through the primary auction. More…
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