The Arena is a new form of Combat that is currently being beta-tested. It is superior to the original Combat system in many ways. One of the biggest issues for players is tedious loadtimes.
There is an "Arena Ranking" which is seperate from the Combat's "Skill Ranking". There are multiple rooms which allow the user to change the fightlist at will. In contrast to Combat fights, the Arena Fights earn the same amount of Blood, cost less Health, and earn a greater amount of Experience.
Not much is officially known about how the new fight system tweaks the old fight system.