Ethereum Layer 2 scaling solutions may soon reach their limits in efficiently scaling the mainnet, warns Gautham Santhosh, co-founder of Polynomial.fi.

Layer 2 solutions are protocols or networks built on top of a layer-1 network to improve its scalability and reduce transaction costs by processing transactions off-chain and then periodically settling the results on the main chain. More and more users have adopted these protocols for faster and more affordable transactions at the end of last year.

This is evident from the increase in the number of blobs or binary large objects sent by hundreds of L2s to Ethereum. Since November, the daily number has averaged a record 21,000, according to pseudonymous data analyst Hildobby’s Dune Analytics dashboard.

Here is the relevant part. Just two Layer 2s – Coinbase’s BASE and World Chain – account for 55% of daily blog activity. So a sustained demand for Layer 2s can quickly exhaust available capacity.

“Ethereum L2s are hitting a brick wall. 55% of all blob space is already consumed by just 2 chains. And at current growth rates, we’re only months away from everything breaking,” said Santhosh at X.

Blobs are like regular transactions with an extra piece of transaction data attached. However, unlike traditional transactions, blob-bearing transactions do not permanently occupy the mainnet space and are only available for 18 days. Layer 2 protocols use blobs to aggregate transactions, process them off-chain and send them to the main chain for verification.

The blob limit per block is six, with a target of three. Once the target is reached, a base fee is charged to regulate demand from L2s.

Since November, demand for blobs has been so high that the target of three has been consistently met. In other words, dozens of L2s compete for the target per block, which increases base fees.

“It’s like having a highway with only 3 lanes for 50 growing cities,” Santhosh said.

The chart shows that the base submission fee has been significantly higher since November compared to previous months, occasionally topping the $50 mark.

These typically increase during market time, airdrops and when a new layer 2 solution goes live, leading to higher user costs. “This affects everyone. DEXs are seeing higher trading costs, perp protocols facing increases in base fees, users paying more for basic transactions,” Santosh explained. “At @polynomialFi our base fees have increased by 300% in recent months.”

According to the pseudonymous Base builder Jesse.base.eth, the increase in the blobbase fee is hampering L2 growth.

“You can see this in the cyclical price increases driven by daily demand cycles. We need more blobs ASAP to help all L2s continue to scale and ensure @ethereum is the center of onchain,” said Jesse on X .

Ethereum’s Pectra upgrade, scheduled for March 2025, is expected to raise the blob limit per block to nine, with a target of 6. But according to Santhosh, doubling capacity buys us “only months, not years.”