What to Know
- Sustained demand for Layer 2s could quickly deplete the available capacity, as explained by Polynomial’s Gautham Santhosh on X.
- The impending Pectra upgrade buys us only months, not years, he noted.
Ethereum Layer 2 scaling solutions may soon reach their limits in effectively scaling the mainnet, warns Gautham Santhosh, co-founder of Polynomial.fi.
Layer 2 solutions aim to enhance scalability and reduce transaction costs by processing transactions off-chain, periodically settling the results on the main chain. More users have embraced these protocols for faster and cost-effective transactions recently.
This trend is evident from the average daily tally of 21,000 blobs posted by hundreds of Layer 2 solutions to Ethereum since November, according to data from pseudonymous analyst Hildobby.
Concern arises as just two Layer 2s – Coinbase’s BASE and World Chain – account for 55% of the daily blob activity. Santhosh stated, “Ethereum L2s are about to hit a brick wall. 55% of all blob space is already consumed by just 2 chains. At current growth rates, we’re only months away from everything breaking.”
Blobs are similar to regular transactions but carry additional transaction data. Unlike conventional transactions, they do not permanently occupy mainnet space and are only valid for 18 days. Layer 2 solutions use blobs to bundle transactions, process them off-chain, and submit them to the main chain for verification.
The limit per block is six, with a target set at three. When the target is reached, a base fee is applied to manage demand from L2s. Since November, demand has been so high that the target consistently meets its cap, causing base fees to rise.
“It’s like having a highway with only 3 lanes for 50 growing cities,” Santhosh remarked.
According to pseudonymous Base builder Jesse.base.eth, this surge in blob base fee is hindering L2 growth, stating, “We need more blobs ASAP to help all L2s continue scaling.”
Ethereum’s upcoming Pectra upgrade, expected in March 2025, is projected to raise the blob limit per block to nine, with a target of six. However, Santhosh warns that this merely buys additional months, not a long-term solution.
