The post The blobs conundrum: Ethereum’s balancing act appeared on BitcoinEthereumNews.com.

This is a segment from the 0xResearch newsletter. To read full editions, subscribe. Running an Ethereum L2 was historically very expensive. L2s had to pay millions in data availability costs to the L1. All that changed with the Dencun hardfork (EIP-4844) in March 2024. It introduced an expansion of blockspace called “blobs” for L2s to post batched data extremely cheaply to the L1. Blob space sits in a separate fee market from the L1. It’s about an order of a magnitude cheaper than L1 blockspace, making it a critical aspect of Ethereum’s rollup-centric roadmap. To illustrate that point, Base paid $9.34 million in expenses for Q1 2024, which saw a sharp drop to $699k in Q2 2024 and $42k in Q3 2024, based on TokenTerminal data. The bad news (or good?) is that blobspace is getting somewhat pricey again as onchain activity picks up in the bull market. Blobs today are limited to six per mainnet block. When blob usage hits a target limit of 50%, or three, a base fee is introduced to regulate demand usage by hundreds of L2s. When usage hits four blobs, base fees are further increased by up to 12.5% for the next block. That is exactly what is starting to take place over the past several weeks (see chart below). Source: Dune In short, blobs aren’t free anymore and L2s need to start paying “rent.” Based on ultrasound.money, blob fee burn is coming up to about 212 ETH in the last 30 days, and has generated substantial blob fees to Ethereum mainnet. Source: Blockworks Research So blobs are generally great. L2s are cheaper to operate, and that’s nice for L2 users. But people (read: ETH holders) aren’t happy because it looks like L2s are getting away with paying barely any expenses to the L1,…

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Filed under: News - @ November 20, 2024 6:18 pm