Ethereum Layer 2 Solutions May Soon Reach Capacity Limits

Ethereum Layer 2 scaling solutions may reach capacity limits, according to Gautham Santhosh, co-founder of Polynomial.fi. Key points include:

• Layer 2 solutions improve scalability by processing transactions off-chain.
• Since November, daily blob submissions have averaged 21,000, driven primarily by Coinbase's BASE and World Chain, which represent 55% of activity.
• Santhosh warns that sustained demand could lead to depletion of available capacity.
• Blob-carrying transactions do not permanently occupy mainnet space and are only valid for 18 days.
• The limit per block is six blobs, with a target of three; this target has frequently been met, increasing base fees.
• Base fees have risen significantly since November, at times exceeding $50, impacting user costs across decentralized exchanges and protocols.
• Santhosh reports a 300% increase in base fees at Polynomial.fi.
• Upcoming Ethereum Pectra upgrade in March 2025 will raise the blob limit to nine, but Santhosh believes this only provides temporary relief.