The post Ethereum L2s About to Hit a Brick Wall, Polynomial’s Founder Says appeared on BitcoinEthereumNews.com.

Ethereum Layer 2 scaling solutions may soon hit their limits in efficiently scaling the mainnet, warns Gautham Santhosh, co-founder of Polynomial.fi. Layer 2 solutions are protocols or networks built on top of a layer-1 networks to improve its scalability and reduce transaction costs by processing transactions off-chain and then periodically settling the results on the main chain. More and more users have embraced these protocols for faster and more affordable transactions late last year. That’s evident from the spike in the number of blobs or binary large objects posted by hundreds of L2s to Ethereum. Since November, the daily tally has averaged a record 21,000, according to pseudonymous data analyst Hildobby’s Dune Analytics dashboard. Here is the concerning part. Just two Layer 2s – Coinbase’s BASE and World Chain – account for 55% of the daily blog activity. So, a sustained demand for Layer 2s could quickly deplete available capacity. “Ethereum L2s are about to hit a brick wall. 55% of all blob space is already consumed by just 2 chains. And at current growth rates, we’re only months away from everything breaking,” Santhosh said on X. Ethereum L2s: Blobs posted since last year’s Dencun upgrade. (Hildobby’s Dune Analytics dashboard) Blobs are like regular transactions with an extra piece of transaction data attached. However, unlike traditional transactions, blob-carrying transactions do not permanently occupy the mainnet space and are only available for 18 days. Layer 2 protocols use blobs to bundle transactions, process them off-chain, and post them to the main chain for verification. The blob limit per block is six, with a target of three. When the target is reached, a base fee is charged to regulate demand from L2s. Since November, the demand for blobs has been so high that the target of three has consistently been met. In other…

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Filed under: News - @ January 20, 2025 7:27 am