The Ethereum community widely anticipates that the upcoming Cancun upgrade will drastically reduce Layer 2 (L2) gas fees, with some estimates suggesting a reduction of tenfold or more. However, a deeper analysis reveals that while fees will decrease, the drop may not be as significant as many hope.
The core of the Cancun upgrade is the implementation of EIP-4844, which introduces "Blob" spaces dedicated to storing L2 transaction and state data. These Blobs have independent gas fee markets and are separate from the main Ethereum chain’s execution layer. The upgrade will add three Blob spaces per block, each capable of holding data comparable to a full mainnet block—approximately 1.77 MB.
Currently, Ethereum’s daily gas consumption is around 107.9 billion units, with Rollup L2s accounting for about 10% of this usage. Basic economics suggests that if demand remains constant while supply increases, prices should fall. If the available space for L2s expands from ~10% of a block to three full Blobs—effectively a 30x increase—gas prices could theoretically drop to 1/30th of their current level.
But this simplified model relies on linear assumptions and overlooks critical factors, especially the competitive strategies Rollup L2s may employ in bidding for Blob space.
Understanding L2 Gas Fee Composition
Rollup L2 gas fees consist primarily of two components:
- Data availability storage fees (making up ~90% of the cost)
- Data availability verification fees
The Blob spaces introduced by EIP-4844 act as new common resources. According to economic theories like the "Tragedy of the Commons," when a shared resource is made available in a competitive market, leading players tend to overconsume it to secure their market position and restrict competitors’ access.
The L2 market is already highly competitive. Major players are consistently vying for developers, users, liquidity, and applications. Introducing Blob spaces adds another scarce resource to compete for.
The Reality of L2 Market Competition
An analysis of the profit trends of five major Rollup L2s over the past year shows seasonal fluctuations but no clear sustained growth. This indicates a capped and zero-sum market where platforms are forced into intense competition.
In such an environment, collaboration for mutual benefit is unlikely. Instead, leading L2s are expected to maximize their use of Blob space—not only to improve their own performance but also to suppress rivals.
One probable strategy is for dominant L2s to adjust their sequencer batching frequency. Currently, batches are submitted every few minutes. After Cancun, they may reduce this interval to as low as 12 seconds—matching Ethereum’s block time—to achieve faster transaction finality and occupy more Blob space.
This tactic would significantly increase verification and batch submission costs. While storage fees may drop due to higher data capacity, the accompanying rise in validation costs would offset much of the saving.
Diminishing Returns on Fee Reduction
The relationship between increased Blob space and lower gas fees isn’t linear. Initial gains will be noticeable, but the benefit will decrease over time due to competitive consumption.
As top L2s compete more aggressively, the reduction in gas fees will experience marginal递减. Beyond a certain point, the upgrade’s positive impact may become negligible.
Based on this analysis, while the Cancun upgrade will reduce Ethereum L2 gas fees, the decrease will likely fall short of the optimistic 90% or more that many expect. The inherent competition among L2s will temper the efficiency gains from EIP-4844.
👉 Explore more strategies for efficient blockchain transactions
Frequently Asked Questions
What is the Cancun upgrade?
The Cancun upgrade is a major update to the Ethereum network, centered around EIP-4844. It introduces Blob storage to improve scalability and reduce gas costs for Layer 2 solutions.
How do Blob spaces reduce gas fees?
Blob spaces provide dedicated storage for L2 data, separating it from mainnet execution. This expands data availability and should lower storage costs, which constitute the majority of L2 fees.
Why might gas fees not drop as much as expected?
Intense competition among L2s for Blob space may lead to overconsumption and increased validation costs. This could offset the savings from expanded storage capacity.
Will all L2s benefit equally from the upgrade?
No. Larger, well-established L2s may use their resources to secure more Blob space, potentially disadvantaging smaller or emerging networks.
How can users avoid high gas fees post-upgrade?
Users can monitor network activity and schedule transactions during off-peak hours. They may also consider using L2s with efficient resource management.
Are there long-term solutions beyond Cancun?
Yes. Continued improvements in data compression, proof systems, and layer-2 innovation will further help reduce costs and increase throughput in the future.