High-frequency trading, in both traditional and decentralized markets, induces latency races and redundant order flow as traders spend resources to win time-sensitive opportunities. We show that auctioning artificial time priority can redirect resources away from wasteful speed races toward auction payments. While such waste is difficult to measure in traditional markets, blockchain transactions provide transparent records of these competitive costs through observable duplicate submissions. We study the introduction of Timeboost, a time-priority auction mechanism on Arbitrum, a blockchain that batches transactions before settlement on Ethereum, as a natural experiment. We find that redundant transactions decrease and platform revenue increases relative to comparable networks, consistent with our theoretical predictions.

翻译：无论是在传统市场还是去中心化市场中，高频交易都会引发延迟竞争和冗余订单流，因为交易者会投入资源以赢得时间敏感的机会。我们证明，通过拍卖人为的时间优先权，可以将资源从浪费性的速度竞争转向拍卖支付。尽管这种浪费在传统市场中难以衡量，但区块链交易通过可观测的重复提交行为，为这些竞争成本提供了透明的记录。我们以Arbitrum（一个在以太坊结算前批量处理交易的区块链）上引入的时间优先拍卖机制Timeboost作为自然实验进行研究。研究发现，与可比网络相比，冗余交易减少而平台收入增加，这与我们的理论预测一致。