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    Ethereum blob fees soar: What does it mean for L2s?

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    The recent airdrop of Scroll’s governance token, SCR, on Ethereum’s layer-2 network led to a spike in blob fees to $4.52. This is the third increase in blob fees since the Ethereum Dencun upgrade in March. While heightened blob fees inflate transaction and transfer costs, they also result in more blob gas being returned to the network. However, fees dropped drastically once network activity calmed. In response to the fluctuating fees, and anticipating transaction limits, Ethereum developers are proposing a new measure to increase the maximum number of blobs per block.

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    Recently, Scroll, a new Ethereum layer-2 network, caused a bit of a stir. The airdrop of Scroll’s governance token, SCR, caused a frenzy and sent blob fees soaring to $4.52. This is the third time blob fees have rocketed since the Dencun upgrade of Ethereum in March.

    This price surge was pointed out on a post by Hildobby, an anonymous crypto data analyst, on October 22nd. Hildobby pointed out that airdrop claims for Scroll tokens were causing blob fees to increase.

    To put it simply, blobs are a part of Ethereum’s infrastructure that was introduced in March to reduce transaction costs on Ethereum’s layer-2 networks. They essentially work as temporary data storage units.

    Blobs became pricier, reaching a four-month high of $4.52 on Oct. 22. It’s rare to see blob prices jump like this. Last time this happened was during a spike in activity in July, and during the launch of Blobscriptions on March 27.

    A higher blob fee isn’t necessarily a bad thing though. Sure, it does lead to higher transaction and transfer costs on Ethereum layer-2 networks. However, on the flip side, they also result in more blob gas being paid back to the network.

    But here’s the kicker, once activity across the layer-2 networks cooled off, the price for blob fees plummeted back to nearly zero.

    Given the rollercoaster ride blob fees have been on, it’s important to mention that just a month ago, Ethereum co-founder, Vitalik Buterin, said that Ethereum was nearing its limit on the available blobs per block. He warned that Ethereum’s ability to handle more transactions could soon hit a wall if the issue wasn’t addressed.

    As a result, Ethereum developers unveiled a new Ethereum Improvement Proposal later in October aimed at increasing the maximum number of blobs per block. Christine Kim, VP of Research at Galaxy Digital, explained the new measure will help optimize the Ethereum network by setting the blob gas target and max values.

    Blobs have already had a dramatic impact on transaction fees on the Ethereum network. After their introduction, transaction fees sank incredibly. To put it in real terms, the Ethereum developer Dan Cline was able to upload the entire script of the Bee Movie to the Ethereum mainnet and it only cost him $14! The drop in transaction fees has enabled some incredibly creative uses of the Ethereum network.

    Source: Cointelegraph

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