The crypto market currently holds a consensus: Post-Cancun upgrade, the average gas fees on Ethereum Layer 2 (L2) solutions are expected to decrease by 10 times or more.
Following the deployment of EIP-4844, the core protocol of the Cancun upgrade, the Ethereum mainnet will introduce three additional Blob spaces dedicated to storing L2 transaction and state data. These Blobs will operate within an independent Gas Fee market.
Key Mechanics of the Cancun Upgrade
- Each Blob can store state data roughly equivalent to one mainnet block (~1.77 MB).
- Current daily Gas consumption on Ethereum: 107.9 billion, with Rollup L2s accounting for ~10%.
The Economics of Gas Fees
According to the supply-demand curve:
Price = Total Demand / Total Supply
If L2 Gas demand remains unchanged post-upgrade, but Ethereum’s sellable block space expands from ~10% of a block to three full Blob blocks (a 30x increase), Gas prices theoretically could drop to 1/30th of current levels.
However, this linear assumption oversimplifies real-world dynamics, especially:
- Competition among Rollup L2s for Blob space.
- Strategic behaviors by leading L2s to monopolize resources.
Breakdown of L2 Gas Costs
Rollup L2 Gas expenses consist of:
- Data Availability (DA) Storage Fees (~90% of costs).
- DA Verification Fees.
The new Blob spaces act as communal resources ("commons"). Per Coase’s theory of the commons, in a free-market environment:
- Leading Rollup L2s may overutilize Blob space to cement dominance and stifle competitors.
- Zero-sum competition for developers, users, and dApps will intensify.
Potential Abuse of Blob Space
Top L2s could:
- Increase Sequencer Batch frequency from minutes to ~12 seconds (matching Ethereum’s block time).
- This accelerates transaction finality but artificially inflates Blob occupancy, limiting fee reductions.
Marginal Utility of Additional Blob Space
As Blob space grows, its impact on lowering L2 fees follows diminishing returns. Beyond a threshold, added space has negligible effects.
👉 Explore how L2 scaling solutions evolve
FAQs
Q1: Will Cancun upgrade reduce Ethereum mainnet fees?
No. The upgrade optimizes L2 cost structures, not mainnet congestion.
Q2: Which L2s benefit most from Blob space?
Established players (e.g., Arbitrum, Optimism) may leverage scale to lock in advantages.
Q3: Can smaller L2s compete post-Cancun?
Yes, but they’ll face steeper challenges due to resource competition.
Q4: How does EIP-4844 improve scalability?
By decoupling L2 data storage from mainnet blocks, enabling higher throughput.
Conclusion
While Cancun will lower L2 fees, the 10x reduction narrative is overly optimistic. Strategic competition among Rollup providers will curb efficiency gains, resulting in more modest savings.