The Rapid Proliferation of Layer 2 Solutions May Pose Existential Risks to Ethereum’s Stability

As Ethereum’s Layer 2 (L2) ecosystem experiences exponential growth, concerns are mounting about the network’s long-term viability. The surge in L2 adoption—driven by scalability demands—could inadvertently undermine Ethereum’s security model and decentralization principles. Fragmentation across rollups, sidechains, and state channels may lead to liquidity dispersion, composability challenges, and systemic vulnerabilities. While L2s currently alleviate mainnet congestion, their unchecked expansion might create interdependent failure points that threaten Ethereum’s core functionality. This paradoxical situation presents a critical juncture for developers and stakeholders to address architectural sustainability before potential network fractures become irreversible.

In Brief

• The current capacity of three blobs per Ethereum block is becoming insufficient in the face of the growth of L2s.
• Even after the Pectra upgrade which will double this capacity, simulations predict rapid saturation.
• A tenfold increase in L2 transactions could push fees up to $0.64 per transaction.
• Ethereum should reach at least 33 blobs per block to maintain viable costs.

A race against time for Ethereum scalability

Since the introduction of the EIP-4844, Ethereum uses “blobsas a low-cost storage mechanism to support L2 networks like Base, Arbitrum and Optimism.

These solutions allow offloading the main network while preserving its security. However, the current capacity of three blobs per block is now a major constraint.

The upcoming Pectra upgrade, scheduled for May 7, 2025, will double this capacity to six blobs per block. But according to the report, this enhancement will remain insufficient in the face of accelerated L2 adoption.

Simulations show that a tenfold increase in transaction volume on these networks would push fees to prohibitive levels, potentially reaching $0.64 per transaction.

Even with future upgrades like PeerDAS and Fusaka, experts estimate that Ethereum should support at least 33 blobs per block to keep L2 transaction costs below $0.02.

Base perfectly illustrates the stakes of the model

The case of Base, Coinbase’s L2 blockchain, perfectly illustrates this dilemma. Since its launch, Base has generated over $106 million in fees, onboarded more than 155 million addresses, and contributed $4.5 million in blob fees for Ethereum.

With an average of 93 transactions per second over the past six months, Base demonstrates both the benefits and challenges of the current model. This blockchain already secures nearly $10 billion in total value, strengthening the Ethereum ecosystem, but its continued growth could put unsustainable pressure on the existing infrastructure.

If Ethereum fails to quickly scale its blob capacity, it risks its L2 strategy being compromised, resulting in a return to high fees that would negate the benefits of scaling solutions.

In a scenario where L2 transactions increase tenfold, Ethereum’s annualized revenue would reach about $1.4 billion, roughly equivalent to its current fee generation.

Ethereum’s future as the backbone of Decentralized Applications will therefore depend on its ability to resolve these technical constraints before they become an insurmountable obstacle to its adoption.

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