Layer-2 Networks Explore New Ways to Drive OP and ARB Token Demand

After proving that rollups can lower transaction costs, the next phase for Ethereum’s Layer-2 sector is about financial design. The main question that this sector will try to answer is what happens to the money that’s generated by these networks.

That question matters because revenue and token value are not the same thing. A rollup can collect transaction fees, earn sequencing income, and accumulate assets in a DAO treasury without creating any direct demand for its governance token. Increasingly, Layer-2 ecosystems are experimenting with mechanisms designed to narrow that gap.

Optimism and Arbitrum are two prominent examples of this shift. The former introduced a buyback program earlier this year, while the latter built new revenue sources like Timeboost. Arbitrum has also developed infrastructure that could support ARB staking and future rewards. 

Although the approaches are different, both illustrate a broader shift from asking whether a Layer-2 can generate revenue to asking how that revenue should interact with its token.

Buybacks create a more explicit economic link

Optimism governance approved a 12-month program allocating up to 50% of qualifying Superchain revenue to purchases of OP. The original proposal described revenue contributions from OP Chains as the program’s economic base.

The mechanism changes the relationship between activity and the token. Previously, Superchain revenue could accumulate in a treasury controlled through governance. Under the buyback program, part of that revenue is instead used to purchase OP.

By August, Optimism reported that 9.45 million OP had been purchased through the first three monthly executions. The tokens were being held rather than burned, meaning the program does not mechanically reduce total supply. It nevertheless creates a source of OP demand tied to qualifying ecosystem revenue.

That distinction is important. A buyback does not give token holders ownership of protocol cash flows in the way shareholders can have claims associated with a corporation. It does, however, establish an observable route through which economic activity can result in token purchases.

For investors evaluating Layer-2 assets, mechanisms of this kind provide information that transaction counts alone cannot.

That distinction is becoming increasingly important as Layer-2 economics mature. ChainReport’s recent coverage highlights the underlying problem: strong network activity does not necessarily translate into value accrual for the corresponding governance token. Buybacks, staking, and other revenue-linked mechanisms are attempts to make that connection more explicit.

Arbitrum shows why protocol revenue is only the first step

Arbitrum demonstrates the other side of the problem: a network can develop meaningful revenue streams before deciding how, or whether, token holders participate economically.

The Arbitrum Foundation reported that Timeboost, its transaction-ordering mechanism, generated more than 1,982 ETH during 2025, with approximately 1,923 ETH directed to the ArbitrumDAO. Its 2025 transparency report also said Timeboost generated more than $6 million during the year and listed transaction fees, Timeboost, the Arbitrum Expansion Program, and treasury management among the DAO’s revenue sources.

Those revenues strengthen the DAO’s financial position. They do not automatically create demand for ARB.

Arbitrum has already explored infrastructure that could change that relationship. A governance proposal approved development of an ARB staking system capable of receiving future rewards from sources including sequencer fees, MEV fees and treasury activities. Crucially, the proposal did not itself activate fee distribution to token holders.

A July 2025 development update said the staking contracts and interface had been completed, but noted that there was not then DAO consensus on funding staking rewards.

The distinction between having a mechanism and funding it is central to token economics. Staking does not necessarily create value merely because tokens can be locked. If rewards come primarily from new token issuance, holders may receive yield while the system simultaneously increases supply. Rewards funded by externally generated protocol revenue create a different economic structure.

Sequencing may become part of token design

Sequencers are particularly relevant because they sit close to the economics of Layer-2 activity.

Rollup sequencers process and order transactions before submitting data to Ethereum. Ethereum’s documentation identifies operator fees as one component of Layer-2 transaction costs, alongside expenses associated with publishing data and, for ZK systems, generating and verifying proofs.

That creates several possible routes for token design. A network could use tokens as collateral for participation in decentralized sequencing, require operator staking, distribute some protocol-generated revenue to participants, or direct revenue toward token purchases.

These models have different effects. Requiring a token to perform an essential network function creates demand based on participation. Distributing revenue creates an incentive to hold or stake it. Buybacks create market demand without necessarily granting holders a direct claim on revenue.

The important issue is not whether a token has more “utility” in the abstract. It is whether the mechanism connects economically valuable activity to demand for the asset without depending primarily on continuing emissions.

Layer-2 valuation may become easier to test

These experiments could eventually make Layer-2 token economics more measurable.

For governance-only assets, valuation often depends heavily on expectations about future utility and the perceived importance of controlling a protocol. Once a network introduces buybacks, revenue-backed staking, or required collateral, investors gain additional observable variables.

They can compare protocol revenue with token purchase spending, measure staking rewards against token issuance, examine what percentage of circulating supply participates in an essential function, and determine whether economic activity is increasing token demand faster than supply expands.

However, neither mechanism can guarantee that these tokens’ prices will rise. Governance can affect buybacks, emissions can dilute staking, and protocol revenues can drastically plummet. Treasury-controlled revenue also remains different from an enforceable ownership claim.

That said, Layer-2 economics are evolving into mechanisms that can be tested against actual network activity; for a sector that has already demonstrated its ability to generate blockspace and users, that may be the more consequential experiment.