The discussion surrounding minimum blob base fees in Ethereum's Layer 2 ecosystem highlights the complexities and misconceptions regarding transaction costs associated with blobs. Contrary to the belief that blobs incur no fees, submitters face execution fees ranging from $0.10 to $3.00 per blob, influenced by the type of data and prevailing gas prices. The introduction of EIP-7762, which proposes a minimum blob base fee of approximately $0.01, aims to stabilize the blob market and reduce the duration of priority gas auctions (PGAs) during periods of high demand. The community's debate over establishing a blobspace reserve price stems from misunderstandings about how blobs are processed on-chain. While the blobspace fee market has struggled to meet demand, leading to a cold-start problem, transactions carrying blobs still incur mainnet gas fees. The concern is that the current limit of six blobs per block, combined with the sluggish response of the blobspace fee market, can lead to prolonged PGAs, complicating transaction pricing for Layer 2 solutions. EIP-7762 seeks to address these issues by adjusting the minimum blobspace base fee, which is currently set at 1 wei. This low fee requires significant block saturation to influence blob pricing dynamics. Historical data shows that blobspace usage has remained below target levels, resulting in minimal fees for most blobs. However, blob-carrying transactions still incur substantial execution fees, which, while lower than historical call data costs, are significant enough to warrant consideration in setting a minimum base fee. The analysis reveals that the execution costs for blob-carrying transactions vary significantly based on the number of blobs included. Transactions with fewer blobs tend to incur higher fees per blob, while those with multiple blobs benefit from economies of scale. This discrepancy is largely due to the different strategies employed by various entities in submitting blobs, with some being more efficient than others. The proposed minimum fee of $0.01 per blob is expected to have a minimal impact on overall costs, with only the least efficient transactions seeing a notable increase. The adjustments aim to create a more functional blobspace fee market, which could help mitigate the cold-start problem and improve the predictability of blob inclusion during high-demand periods. The response time of the blobspace fee market is also a critical factor. Under EIP-4844, the maximum adjustment to the blobspace base fee is capped at 12.5%, which can lead to delays in reaching equilibrium during demand surges. Historical events, such as the LayerZero airdrop, illustrate the challenges faced when the blob base fee remains at its minimum, resulting in significant delays before blobspace fees contribute meaningfully to total transaction costs. In conclusion, while raising the minimum blobspace base fee is not a panacea, it represents a necessary adjustment to enhance the protocol's efficiency. The anticipated market impact is expected to be minimal, primarily affecting the lowest quality blobs, while still ensuring that the overall costs remain competitive. The ongoing discussions within the community reflect a commitment to refining the blob market and addressing the challenges posed by fluctuating demand and transaction complexities.

L2 blob fees increased dramatically on Monday, accounting for 21% of batch posting costs to Ethereum (blobs submitted per block exceeded the target). This spike, likely caused by the zkSync airdrop, indicates that blob fee dynamics are important for L2 operators to monitor because they can impact cost and revenue projections.

Blobs, the new storage type for Ethereum L2s introduced in the March 13 Dencun upgrade, have been overrun by the inscriptions mania that previously congested several other chains earlier this year. BlobScriptions caused blob gas fees to spike to around $18, though it has since fallen to around $1.20. The fees should return to normal levels as the true value of blobs becomes evident after this price discovery phase.

Ethereum's recently introduced Blobs have drastically reduced data availability costs for rollups but have volatile price movements that make future costs unpredictable. Blobspace derivatives offer an opportunity for rollups to hedge against future price changes and de-risk operational costs. Outstanding issues include physical delivery, protecting against market manipulation, and creating a proper seller incentive structure.

Ethereum's reliance on Layer 2 (L2) solutions is leading to its downfall by fragmenting the ecosystem, pushing users towards centralized L2s, and undermining the original promise of decentralization. L2s are siphoning off Ethereum's fees and users, making it impossible for Ethereum to scale effectively at Layer 1, which could ultimately lead to Ethereum's demise while benefiting L2s and their backers.

This thread explores the growth and potential of the Ethereum L2 Base. It asserts that Base differentiates itself as a 'builder chain'. While Base was relatively slow to gain traction, the current uptick in speculative activity, especially in memecoins, interest in the ecosystem has been increasing significantly. The affordable gas fees and increasing user base present ample opportunities for developers to build applications.

This thread cites several factors for the bull case for Ethereum and an eventual $10,000+ price. The early pivot to Layer 2s and the commitment from innovative companies, like StarkWare and Coinbase, in building L2s demonstrates industry confidence. Even though L1 transaction costs remain high, the mainnet remains a place for the highest-security transactions, and the deflationary nature of ETH incentivizes investors to hold. Institutions and governments seem to be warming up to Ethereum, as demonstrated by BlackRock’s onchain fund and the CFTC’s declaration that Ethereum is a commodity.

Though EIP-4844 reduced L2 fees, it has caused bot actions and spamming. Telegram bots are paying over 20x higher gas fees, with revert fees on top L2s spiking around 10% to 20%. There aren't many sandwich attacks with L2 single sequencer architectures, but shared sequencers will introduce mempools and, therefore, high MEV.

In recent discussions within the Ethereum community, there has been a notable focus on the concepts of solo staking, local block building, and the potential increase in blob throughput in the Pectra upgrade. Two main factions have emerged: one advocating for the increase in blob throughput and the other urging caution until more concrete data is available. A prevailing sentiment among community members is the recognition of solo stakers as integral to Ethereum's ecosystem. Despite the lack of consensus on the minimum requirements for validators, there is a clear stance against compromising solo or home stakers for the sake of additional scaling. This emphasis on the importance of solo staking raises critical questions about the balance between decentralization and scalability. Specifically, it prompts a discussion on the threshold at which the contributions of lower-bandwidth stakers to decentralization may no longer justify the limitations they impose on Ethereum's scalability. The author aims to provide insights and data to assist the community in making informed decisions regarding the proposed increase in blob throughput. Recent data indicates that the average reorganization (reorg) rate of blocks has been around 0.2%, with professional node operators experiencing fewer reorgs compared to solo stakers and smaller operators. The reorg rate has shown a downward trend since the Dencun hardfork, benefiting various types of operators, including solo stakers and larger entities like Lido and Coinbase. When examining local block building, it is noted that local builders have a reorg rate of approximately 1.02%, which is significantly higher than the 0.20% rate for MEV-Boost builders. This disparity suggests that local builders are more susceptible to reorgs, and the data indicates that the reorg share for local builders has either remained constant or increased post-Dencun. Interestingly, local builders tend to include more blobs in their blocks, which may contribute to the challenges they face in maintaining stability. The analysis also highlights that solo stakers represent a significant portion of local builders, and they often miss more slots compared to professional validators due to slower machines and less reliable internet connections. This situation is compounded by the fact that local block builders do not benefit from the rapid propagation offered by MEV-Boost relays, which utilize timing strategies to optimize block proposals. The conversation continues with community members discussing the implications of these findings on annual percentage rates (APR) and overall revenue, as well as the potential reasons behind the higher reorg rates for local builders. The dialogue reflects a collaborative effort to understand the complexities of Ethereum's staking and block building dynamics, emphasizing the need for ongoing analysis and data-driven decision-making in the evolving landscape of the network.

"Based Rollups" could significantly boost demand for ETH by restructuring validator incentives. By allowing Layer 2 rollups to tap into Layer 1 validators for processing, validators can earn additional income, enhancing ETH staking returns without increasing supply, potentially driving long-term ETH value higher as Ethereum becomes more deflationary and yield remains competitive.

Ethereum has activated the Dencun upgrade, which is expected to catalyze growth on L2 networks like Arbitrum and Polygon by reducing fees. The hard fork accomplished this through "proto-danksharding", adding a new place for data storage on the blockchain at a lower cost. The upgrade is expected to make transaction settlements more efficient and cheaper for rollup networks, which will in turn bring down fees for end users.

Layer 2 solutions on Ethereum not only expand its technical capabilities but also foster a diverse and inclusive culture within the blockchain community, leading to unique technological advancements and cultural influences across different blockchains, ultimately driving innovation within the ecosystem.

This thread breaks down how over $4B in MEV (Maximal Extractable Value) has been captured on Layer 2 (L2) networks like Arbitrum, Optimism, and zkSync, highlighting the impact of transaction sequencing policies such as Arbitrum's FCFS, Optimism's Priority Gas Auction (PGA), and FastLane. These policies influence how MEV opportunities like arbitrage and sandwich attacks are handled, with solutions like Timeboost aiming to balance fairness and efficiency by introducing auctions and reducing latency races.

Base, an Ethereum L2 network created by Coinbase, saw transactions soar to over 1 million and fees drop after the Dencun upgrade.

L2s can play games by posting data to the mainnet, using blobs when it is cheap and slowing their posting frequency when it is expensive. During a previous period of high fees, Scroll stopped posting altogether while Taiko slowed its page. Mainnet power users and builders are critical to supporting ETH as a utility token, though L2s using it as their primary form of currency improves its monetary premium.

ArbitrumDAO faces crucial decisions with proposals for ARB staking, a new transaction ordering policy, and increasing the base gas fee. While staking could align incentives and boost voter participation, it might be less effective due to reduced surplus fees. The new ordering policy needs careful consideration regarding ETH collection versus ARB burning. Raising the gas fee could impact network competitiveness and user activity.

Ethereum has been criticized for block builders' increasing dominance over their chain control, which is a consequence of how time-discrete systems create varied value in their storage slots. This author proposes a specification for native transaction bundling for onchain applications, which gives more control over sequencing.

The recent activity in the cryptocurrency market highlights significant developments, particularly regarding Ethereum (ETH) and its performance. ETH has reached $45 million in weekly fees, marking the highest level since June 10, 2024. This surge in fees indicates a robust increase in network activity, showcasing Ether's resilience and growth, even as Bitcoin continues to dominate discussions in traditional finance as "digital gold." The focus on Ethereum's performance is crucial, especially as it contrasts with Bitcoin's narrative. While Bitcoin garners more attention, Ethereum's increasing network engagement and price movements are noteworthy. This trend suggests that investors and users are recognizing the potential of Ethereum beyond its initial use cases, leading to a more dynamic ecosystem. In addition to Ethereum's performance, the broader landscape of cryptocurrency investments is evolving. For instance, discussions around leveraged trading strategies, such as those employed by significant players in the market, reveal the complexities and risks involved in trading. One example includes a prominent Aave GHO whale who has been strategically increasing their leveraged ETH position. This approach involves minting GHO with wrapped staked ETH (wstETH) and converting the stablecoin back into ETH, highlighting the intricate strategies traders are using to navigate the market. Moreover, the emergence of new platforms like Symbiotic, which facilitates coordination between users and services for enhanced security through liquidity, indicates a growing interest in innovative solutions within the Ethereum ecosystem. This platform aims to compete with existing solutions like Eigenlayer, which has already seen substantial growth in total value locked (TVL). As the market continues to evolve, understanding on-chain analytics and market indicators becomes increasingly important for investors. Tools like the Market Value to Realized Value (MVRV) ratio can provide insights into market trends, helping traders identify potential buying opportunities when the value dips below certain thresholds. Overall, the cryptocurrency market is witnessing a blend of traditional narratives and innovative strategies, with Ethereum's performance and the rise of new platforms playing a pivotal role in shaping the future of digital assets.

This bull cycle, Ethereum may be the only tokenization platform with a spot ETF classified as a commodity, giving it a massive advantage in onboarding institutions like BlackRock's BUIDL fund. It is also the chain of choice for Coinbase, as evidenced by the Base L2. Institutions will pay premium transaction fees for its stability and liveness, and they will value its high cash flow and real yield.

Blobstream is now live on the Base Mainnet, marking an evolution in onchain development. Developers can now create high-throughput blockspaces, comparable to smart contracts, using Celestia's modular data availability (DA) layer. This innovation removes the need for alternative Layer 1s or centralized DA solutions, allowing for seamless deployment within the same ecosystem. Developed by Succinct Labs, Blobstream acts as a data attestation bridge, ensuring rollup data integrity on Celestia through DA attestations and Merkle proofs and facilitating the scaling of Ethereum's rollup frameworks.

Ethereum is currently facing challenges like regulatory uncertainty, competition from Solana, and declining revenues due to Layer 2 growth. However, despite these issues, Ethereum remains dominant in key sectors like DeFi, stablecoins, and corporate adoption, making it a contrarian bet with potential upside.

The discussion centers around the evolving landscape of Layer 1 (L1) and Layer 2 (L2) blockchain ecosystems, particularly focusing on the competition for developers and talent. As these ecosystems mature, the competition has intensified, with two primary players emerging as leaders in the developer community: Ethereum Virtual Machine (EVM) and Solana Virtual Machine (SVM). EVM is largely represented by Base, while SVM is associated with Solana. Founders who join the Alliance typically have a clear preference for specific L1s or L2s, which reflects the current market demand and the success of these chains in attracting high-quality builders. The projects that arise from the Alliance are indicative of where developers choose to focus their efforts. Convincing builders to adopt new chains is challenging unless those chains offer significant technical advantages, such as a tenfold improvement over existing options. Even then, the willingness to take on platform risk is decreasing as established chains like Base and Solana continue to enhance their capabilities, including throughput, cost efficiency, and speed. The cultural dynamics between the Base and Solana communities are also noteworthy. The Base community is characterized by its inclusivity, a focus on creators, and a mission to onboard a broader audience onto the blockchain. In contrast, Solana tends to attract engineering-focused builders and emphasizes a diverse range of product development. This divergence in community values has led to a cultural clash, with some founders transitioning between chains based on their alignment with these differing philosophies. While the market is not strictly winner-takes-all, certain chains are currently gaining a significant share of developer interest. As new chains prepare to enter the market, they will face increasing challenges in competing against the established momentum of leading chains. The ongoing cultural shifts and the competitive landscape will likely shape the future of blockchain development and community engagement.

ENS Labs is proposing expanding to a Layer 2 network and renaming itself ENSv2. This proposal promises to further decentralize and enhance ENS' utility and flexibility beyond Ethereum mainnet's limitations. ENSv2 will reduce gas costs, increase transaction speeds, and introduce a hierarchical registry for .eth names, offering more customization and better multi-chain interoperability.

Ethereum's daily ETH burn rate has hit a yearly low, mainly due to significantly reduced gas fees (gas on Ethereum is now 5 to 10 gwei). The decrease in gas fees, the lowest this year, is affecting the network's deflationary mechanism established by the London hard fork.

Ethereum's next hard fork, Pectra, consists of updates to the Prague execution layer and Electra consensus layer. It will be released in Q1 2025 and feature PeerDAS data availability sampling to improve rollup scaling and upgrades to the EVM Object Format (EOF) to support a better UX. It should help to alleviate pressure on the networking layer and support increased blob demand.

MegaETH is an L2 with sub-second latency and 100k TPS. It recently had angel participation from Vitalik Buterin. MegaETH separates transaction processing into three node types - sequencers, provers, and full nodes - that centralize block building but retain trustless verification. It also stores its state in the sequencer memory and optimizes its compiler to improve efficiency.

ePBS, a change to the Ethereum protocol that separates blocks into consensus and execution parts, now has an EIP number. Introducing this feature gives attesters more time to execute transactions, makes proposer-builder interactions trustless, and removes the need for staker middleware.

Wall Street struggles to grasp Ethereum's value, with BlackRock simplifying it as "a bet on blockchain technology," which may not resonate with traditional investors. Despite Ethereum ETFs launching, ETH's price has dropped. Analysts maintain a bearish outlook on ETH, highlighting stagnant fundamentals, lack of major marketing, and competition from platforms like Solana as key challenges.

This article outlines a comparison between Solana and Ethereum's transaction mechanisms. Solana's advantages include a minimal transaction fee and quick execution time. However, Solana's fee mechanics are insufficient for scalability, unlike Ethereum's dynamic transaction fees which are efficient and resourceful. Despite Solana's continuous block building and multi-threaded scheduler, weak inclusion guarantees and less reliable prioritization make substantial network improvements necessary.

OKX, a major cryptocurrency exchange, has launched its own Ethereum layer-2 scaling network called X Layer, built using Polygon's AggLayer solution. X Layer aims to provide faster and cheaper transactions, as well as seamless interoperability across different blockchains. The launch positions OKX as a competitor to Coinbase's Base, another layer-2 network built on Optimism's OP Stack.