Blobs significantly reduced the cost for L2s to post data to Ethereum, allowing them to operate more profitably, CoinMetrics researcher analyst Tanay Ved told Cointelegraph this week. Since then, L2 user demand has soared, especially on Base, the L2 launched by Coinbase in August 2023 on the Ethereum mainnet. As Ved noted in an April 8 blog, Base has earned a total of ~$98 million in revenues from user-transaction fees (including base and priority fees), “while paying only ~$4.9M to the Ethereum base layer, resulting in a total estimated profit of $94M since the Dencun upgrade.” Ved added:This dynamic has led to many questioning whether Layer-2s are net positive for Ethereum, or whether they are ‘extractive.
Ethereum hard forks like Pectra, which went live yesterday (May 7), and Fusaka, scheduled for late 2025, will increase blob throughput.“This means L2s will be able to post more blobs, potentially driving higher total blob fees to mainnet,” Ved told Cointelegraph. Ethereum is already consistently hitting the current blob target of three per block, as the chart below shows.“Pectra will raise this to six blobs per block — with a max of nine — creating room for increased fee capture as L2 activity scales,” added Ved.
All transactions are settled on Ethereum, and so far, Base has paid Ethereum more than $20 million in settlement fees since Base’s inception.” One can see these fees on Token Terminal under “cost of revenue,” the spokesperson added. “Overall, Base makes getting onchain more accessible with fast and cheap transactions and helps grow the Ethereum ecosystem by onboarding more users, builders, apps and assets, all of whom are transacting in ETH and driving demand,” said the spokesperson.
or
Share This Story
Article Details
Author / Journalist: Cointelegraph by Andrew Singer
The story "Are layer 2s good for Ethereum, or are they ‘extractive?’" has 1572 words across 62 sentences, which will take approximately 7 - 14 minutes for the average person to read.
Which news outlet covered this story?
The story "Are layer 2s good for Ethereum, or are they ‘extractive?’" was covered 12 hours ago by Coin Telegraph, a news publisher based in United States.
How trustworthy is 'Coin Telegraph' news outlet?
Coin Telegraph is a fully independent (privately-owned) news outlet established in 2013 that covers mostly crypto news.
The outlet is headquartered in United States and publishes an average of 33 news stories per day.
It's most recent story was published 7 hours ago.
What do people currently think of this news story?
The sentiment for this story is currently Neutral, indicating that people are not responding positively or negatively to this news.
How do I report this news for inaccuracy?
You can report an inaccurate news publication to us via our contact page. Please also include the news #ID number and the URL to this story.
