Ethereum is having a scaling problem, and it is not as modern as other chains like Solana. The legacy chain can only process around 15 transactions per second, which is not enough to run larger applications. To solve this problem, developers have created layer-2 solutions, such as Polygon and Arbitrum, to scale Ethereum.
However, these layer-2 solutions have been criticized for being parasitic, as they take away transactions from the main net and earn revenue without fairly compensating validators. Recently, blobs, a new feature introduced after Dencun, have made layer-2 transactions more efficient and affordable. Blobs are temporary data packets that can handle 16 MB of data, allowing nodes to process more transactions regardless of the main net’s activity.
This will improve the scalability of the Ethereum network once Sharding is live as part of Ethereum 2.0. An analyst believes that blobs will significantly benefit ETH bulls in the long run, as they will make ETH deflationary while improving network scalability. They predict that the demand for ETH will come from apps launching on layer-2s, rather than blob fees.
The boom in layer-2s is driving innovation and increasing demand for ETH, as seen with the Pepe Unchained project, which has raised over $26 million.
