After the Cancun upgrade, Ethereum successfully reduced fees, but Layer 2 still faces challenges. While DA costs have decreased, enabling Layer 2 projects to thrive with minimal fees (as low as $0.001-$0.01), the transaction volume is still far from benefiting Layer 1.

In the short term, Ethereum’s Rollup strategy is proving successful, with Layer 2 becoming the go-to chain for high-frequency transactions, offering low fees, great UX, and high TPS. However, what happens when transaction volume on Layer 2 surges and Blob space becomes saturated?

DA fees may increase, and if costs go beyond 50%, many Layer 2 projects could withdraw from the competition for Blob space, seeking alternatives like Celestia or Validium. The dynamic Blob fee market is not yet activated, and the need for Layer 2 growth is crucial for future scalability.

Could the Cancun upgrade have been too successful? 🤔 The question remains as Layer 2 daily active users and ecosystem scale need to grow to support its long-term value proposition.