Try adding more low-level arenas to the mix. There are many new players that mention it in global chat as well as in my own guild that state there aren't enough arenas for them to join at their low level, unless it is the novice ones that they have maxed. Perhaps also add a tiered level of cost to joining arenas that are proximate your level. That way the high-level players aren't scooping up all the low-level arenas without having to pay the extra cost to do so. Additionally, this would allow low-level characters to join high-level arenas despite the unlikelihood of their winning. It could be made cheaper for them to join, based on the algorithm and get more participation. It's all about tactics after all.
As for prizes, I see a lot of good ideas already, but the potions could use some more variety. I would love to see a
BE500 potion available to purchase for tokens for example. This would not diminish the BE575 that composers make right now, but it would put it within reach for those that focus on this part of the game. I am sure that other examples could be found when looking at that list of potions.
Maybe add in an exchange of PvP tokens for Arena tokens. That way the prizes are separate, but it does add another form of in-game trade that can be controlled by the cows.