Recently, the voices of FUD Ethereum and @VitalikButerin have become stronger. In particular, overseas KOLs have had very interesting discussions on topics such as Blobs space utilization and Layer2 revenue. Putting aside the emotions of the secondary market, how should we evaluate Ethereum's layer2 strategy simply by looking at the data? Next, I would like to express my opinion:
Let’s go back to before the Ethereum Cancun upgrade. Everyone was enthusiastic about RaaS and DA War, because the layer2 under the one-click chain was springing up like mushrooms after rain, which would directly drive the demand for Ethereum mainnet DA capabilities for layer2 Batch transactions, and then set off a price war for Blobs space. Then a large amount of ETH was destroyed in the layer2 War, and Ethereum turned from inflation to deflation, driving up the price of Ethereum, and everyone was happy.
However, the fact is that the grand strategic narrative of Rollup as a Service died down after the Cancun upgrade. The basic infra capabilities for one-click chain launch were in place, but it was not expected that so many developers would compete to launch chains.
1) The space utilization of Blobs is not saturated enough. According to statistics, the utilization rate is only 80%. Layer2 can optimize the utilization rate of blobs and actively choose whether to occupy blobs in the current block. For example, it monitors the utilization of blobs in the current block. If the utilization rate is too high, it will jump directly to the next block. This directly prevents the FOMO of the blob rate market.
2) The usage fee rate of Blobs and the DA cost of Layer2 projects currently only account for 0.3% of their total revenue. According to incomplete statistics, the daily revenue of the Layer2 project is about US$500,000, while the cost of Blobs space usage fee only accounts for 0.3%, which is far from the level of saturation. Although the Layer2 project has other software and hardware costs such as Sequencer servers and Prover verification collaboration, the visible DA cost is not high.
On the one hand, this shows that Ethereum has been very successful in reducing fees after the Cancun upgrade, but on the other hand, it shows that the current user volume and transaction volume of Ethereum layer 2 cannot deliver value to layer 1 at all, not to mention the optimistic "deflation expectations"?
In my opinion, through data analysis, Ethereum's Rollup-centric strategy is still successful in the short term. After all, the DA cost has declined, the layer2 project party can afford to build a large chain ecosystem with little burden, and the gas fee for users using layer2 has also dropped to an imperceptible range (US$0.001-0.01).
A large number of users will use layer2 as a high-frequency transaction chain. Isn't it the first step of Ethereum's Rollup strategy to make layer2 the first choice with low fees, good experience, and high TPS ahead of Ethereum? Therefore, in the short term, Ethereum's layer2 strategy is undoubtedly successful.
In the long run, when the transaction volume on layer2 increases exponentially and the space utilization of Blobs is highly saturated, what changes will occur?
The DA fee rate will increase, although there is limited room for growth from the current 0.3%. However, if the DA cost accounts for more than 50%, a large number of layer 2 projects will voluntarily withdraw from the battle for Ethereum Blobs space, and the demand for third-party DA suppliers such as Celestia will increase. In addition, some layer 2 projects will directly transform into layer 3, or even Validium, which will make the Ethereum Rollup ecosystem more diverse and rich;
The question is, the narrative and enthusiasm stacked on Ethereum layer 2 cannot be sustained because the Ethereum Cancun upgrade was too successful? Yes, that’s right.
The utilization rate of Blobs space is not saturated, and the dynamic market of Blobs rates is not activated. All the contradictions are on the user and ecological scale of layer2, which urgently needs to grow. The problem is that the daily activity and income of the top layer2 are not too bad for a project.
So, do you understand the dilemma of Ethereum layer2?
