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Most arcjet thrusters seem to use hydrazine or ammonia, with some research being done on hydrogen and water arcjets.
I know hydrazine is easily catalyzed into exothermic decomposition, and it and its cousins UDMH and MMH are hypergolic with NTO, but those wouldn't seem to be requirements for an arcjet propellant, and hydrazine has the downside of being fairly toxic.
What's the advantage of using hydrazine in arcjets?
Specific heat, also known as heat capacity, in J/kg K (Joules per kilogram per Kelvin). Water, of all liquids, has the highest specific heat; ammonia and hydrazine have much lower specific heats. Also, most metals don't react with gaseous hydrazine, it being an oxygen slurper.
The chapter "Conclusions and Recommendations", p. 24 sqq of this document, clearly points, for good hydrazine compatibility, at aluminum alloys such as AA6061-T6, certain martensitic steel alloys and the Ti6Al4V Titanium alloy.
For a NASA reference on how materials are tested on hydrazine compatability, see Appendix A7 in this NASA document.
