The dilemma and future development of Ethereum Layer2: Data analysis reveals successes and challenges

With the development of Ethereum, the application and benefits of Layer2 second-layer solutions have become a hot topic of discussion. Independent researcher Haotian has conducted an in-depth analysis of the recent FUD (fear, uncertainty, and doubt) sentiment towards Ethereum and the voice of Ethereum co-founder Vitalik Buterin. This article will explore the current status and future challenges of Ethereum Layer2 from a data-driven perspective.

Expectations and Reality of Cancun's Upgraded Layer 2 Market

Haotian stated that prior to the upgrade in Cancun, the market was filled with anticipation for Rollup as a Service (RaaS) and Data Availability (DA) wars.

The rapid growth of Layer 2 signals an increase in Blobs space demand, triggering price wars that drive ETH burning, leading Ethereum into a deflationary phase and boosting prices. However, the reality post the Cancun upgrade did not meet expectations. While the infrastructure for Layer 2 is in place, there hasn't been the anticipated influx of developers competing.

Blobs Space Utilization and DA Cost Analysis in Layer 2

Blobs space utilization has not reached saturation, only around 80%. Layer 2 can choose to use Blobs in specific blocks to optimize usage by monitoring the current block's Blob utilization. However, this dynamic adjustment also prevents the Blob fee market from forming a fear of missing out (FOMO).

Currently, the cost of DA in Layer 2 projects accounts for only 0.3% of their total revenue. Statistics show that Layer 2 projects generate approximately $500,000 in daily revenue, with Blobs space usage costs being very low. Although Layer 2 still needs to pay for other costs such as Sequencer servers and Prover verification collaboration, the cost of DA is relatively low, indicating the success of the Cancun upgrade in reducing fees.

Possible Development Direction of Ethereum Layer 2 Ecosystem

Haotian stated that in the short term, Ethereum's Rollup-centric strategy has been successful: DA costs have decreased, the burden on Layer 2 projects has been lightened, and user Gas fees on Layer 2 have dropped to an imperceptible range of $0.001-0.01, prompting more users to choose Layer 2 for high-frequency trading. This means that Layer 2 can become a pioneer for Ethereum, providing services with low fees, high user experience, and high transactions per second (TPS).

However, as the transaction volume of Layer 2 grows exponentially, the saturation issue of Blobs space will become more prominent, and DA costs may increase significantly. Once the DA cost ratio exceeds 50%, some Layer 2 projects may exit the competition for Blobs space, turning to third-party DA providers like Celestia, or transitioning to Layer 3 or even Validium, making Ethereum's Rollup ecosystem more diversified.

Challenges and Future Development of Ethereum Layer 2

Haotian believes that currently, the utilization and popularity of Ethereum Layer 2 have not met expectations. One of the main reasons is that the Cancun upgrade has been too successful, leading to unsaturated Blobs space utilization and the fee market not being activated. These challenges ultimately boil down to the need for more users and a larger ecosystem scale for Layer 2. Nevertheless, the existing daily active users and revenue of Layer 2 still hold certain appeal, demonstrating partial success in the short term for the Layer 2 strategy.

The strategic deployment of Ethereum Layer 2 is succeeding but faces challenges of continued growth. In the future, as the transaction volume of Layer 2 increases and Blobs space gradually saturates, DA costs will become a crucial factor affecting the development of Layer 2. Balancing costs and competition, and expanding the Layer 2 ecosystem, are key to the future development of Ethereum.