The arpeggio is created by the sequencer, changing the pitch of the VCO via the FM input (100% 1V/oct). The root note is played with the computer keyboard into the V/oct input of the VCO.
In this patch the arpeggio is only audible when a key is pressed due to the GATE triggering an ADSR (envelope). The ADSR gradually rises during the ATTACK phase and therefore increases the volume. During the DECAY phase the ADSR gradually lowers the volume level via the VCA. A delay and a second VCA, which is quickly rising / falling because of the signal from an LFO, change the timbre of the sound whilst it is fading out.

Additionally in this patch the signal from the LFO is going through a filter for overdrive and resonance tweaks.