Ethereum Layer 2 scaling solutions are facing challenges in efficiently scaling the mainnet, according to Gautham Santhosh, co-founder of Polynomial.fi. Layer 2 solutions have become popular among users seeking faster and more affordable transactions by processing transactions off-chain and settling the results on the main chain periodically.
The number of blobs posted by various Layer 2s to Ethereum has seen a significant increase since last year. Data from Hildobby’s Dune Analytics dashboard shows an average of 21,000 blobs posted daily since November. However, the concentration of blob activity on just two Layer 2s – Coinbase’s BASE and World Chain – is raising concerns about the sustainability of available capacity.
Santhosh warns that Ethereum Layer 2s are approaching a critical point, with the current growth rate indicating that capacity could be exhausted in a matter of months. Blobs, which are used to bundle transactions off-chain and post them to the main chain for verification, play a crucial role in the operation of Layer 2 protocols.
The demand for blobs has been so high that the target of three blobs per block is consistently being met, leading to higher base fees to regulate the demand from Layer 2s. This has resulted in increased costs for users across different platforms, such as decentralized exchanges and protocol protocols.
The base submission fee for blobs has seen a significant increase since November, occasionally exceeding $50. These spikes in fees occur during peak demand periods, impacting the overall user experience and hindering the growth of Layer 2 solutions.
Jesse.base.eth, a builder of Base, highlights the importance of increasing blob capacity to support the scaling of all Layer 2s and maintain Ethereum’s position as the center of on-chain activity. The upcoming Pectra upgrade in March 2025 is expected to raise the blob limit per block to nine, but Santhosh cautions that this will only provide a temporary solution.
In conclusion, the challenges facing Ethereum Layer 2 scaling solutions highlight the need for continuous innovation and upgrades to meet the growing demand for faster and more affordable transactions on the mainnet. As the ecosystem evolves, developers and users must collaborate to address these scalability issues and ensure the long-term success of Layer 2 solutions on Ethereum.