Note: this proposal will be subject to an individual Snapshot vote; if it reaches a quorum of 3% of votable $ARB, it may be combined with several other maintenance-related proposals for a joint Tally vote.

Abstract

This proposal will remove the Amortized Cost Cap, which is expected to result in higher gas fees for users on Arbitrum Nova. This increase is necessary to ensure the long-term sustainability of the network and reduce the financial burden on the Arbitrum Foundation. Given the diminishing relevance of Nova and the evolving Layer 2 landscape, lifting this cap will prevent inefficiencies and unnecessary constraints on network operations.

Motivation

Arbitrum Nova was initially positioned as a cost-efficient alternative to Arbitrum One, offering 30-50x cheaper transaction fees at launch. However, several developments have significantly reduced Nova’s competitive advantage:

• EIP-4844 blobs: The introduction of EIP-4844 significantly reduced the cost difference between Nova and Arbitrum One, from 30-50x to a mere 2x. This difference is negligible given the already low costs on Arbitrum One.
• Orbit adoption: Orbit chains have become a more attractive option for teams seeking gas sponsorship and customization. Their ease of deployment has led many teams to prefer Orbit chains over Nova.

Given the now-minimal cost advantage over Arbitrum One and the rise of Orbit chains, maintaining an amortized cost cap on Nova — which currently prevents batch posters from recovering full L1 costs — is no longer justifiable. Removing the cap will stop the Arbitrum Foundation from subsidizing these subsidies and align cost recovery with actual usage.

Rationale

The continued enforcement of an amortized cost cap on Nova introduces inefficiencies that do not align with its current usage patterns and network activity. This setting limits the percentage of L1 posting costs that batch posters can recover from the chain (denominated in basis points, or bips, where 10000 = 100%). Currently, the cap prevents full cost recovery, forcing the Arbitrum Foundation to subsidize the difference. Removing the cap (i.e., setting it to 0 bips) would:

• Ensure batch posters are able to recover 100% of their L1 posting costs.
• Eliminate recurring deficits currently paid by the Arbitrum Foundation.
• Reflect Nova’s lower strategic priority within the broader Arbitrum roadmap.

Historical data on Arbitrum Nova batch poster deficits can be seen here. ​This data highlights the ongoing inefficiencies and justifies the removal of the amortized cost cap.

Key Terms

• Amortized Cost Cap (setAmortizedCostCapBips): A parameter within the ArbOwner system contract that limits the percentage of Layer 1 transaction posting costs that batch posters are allowed to recover from the network. Expressed in basis points (bips), where 10000 = 100%.
• ArbOwner Contract: A privileged precompiled contract that allows the ArbitrumDAO to configure core protocol settings, such as the amortized cost cap.
• EIP-4844: An Ethereum Improvement Proposal introducing blob-carrying transactions. Its implementation has significantly reduced the cost disparity between Arbitrum Nova and Arbitrum One, undermining the original economic rationale for Nova’s fee model.
• Batch poster transactions: Transactions that aggregate multiple operations and submit them as a single on-chain transaction. With the enforced fee cap, these transactions become less cost-effective under current network dynamics, contributing to operational inefficiencies.

Specifications

The DAO will execute a call to the ArbOwner contract on Arbitrum Nova to set the amortizedCostCapBips value to 0, thereby allowing batch posters to recover 100% of their L1 posting costs.

Steps to Implement

More detailed information about the specific implementation will be provided closer to the date of the formal on-chain Tally vote.

Timeline

The following timeline outlines proposed milestones from initial discussions to full implementation. Adjustments may be made based on community feedback and DAO governance requirements.

1. May 29th: AIP forum post outlining the proposed modification to Arbitrum Nova
2. June 19th: Temperature check held on Snapshot
3. July/August: Should the temperature check pass, as specified above, it will be included in the AIP draft combining several other maintenance-related proposals for a joint Tally vote.
4. On-chain Tally vote: Will commence once all other maintenance-related proposals have passed the respective temperature checks on Snapshot.
5. Post-on-chain Tally vote: Should the Tally vote pass, the waiting period on L2 will last 1 week after Tally vote is finalized, after which, the removal of amortized cost cap will be executed on Arbitrum Nova.
6. Post-implementation monitoring & reporting: A public dashboard will be continuously maintained and updated with new data, from 1-month after the removal of the amortized cost cap.