The implementation of the Dencun upgrade in March 2024, which activated EIP-4844 (Proto-Danksharding), has modified the cost structure of second-layer networks. Transaction fees on major rollups have decreased between 90% and 95%, establishing a new pricing paradigm. This structural shift, however, introduces a set of economic and technical that determine its future viability.
Mechanism of Cost Reduction: The Blob Space
The technical foundation of this reduction resides in the creation of a temporary and dedicated data space for rollups, denominated “blobs.” Previously, L2 networks published their transaction data to Ethereum’s main layer using calldata, a method that competed for block space with the rest of the network’s transactions.
EIP-4844 establishes an independent fee market for blobs, analogous to the EIP-1559 mechanism, where the price is determined by the supply and demand of this specific space. This segregation reduces the L2s’ dependency on base layer congestion. The architecture of type-3 transactions (blob-carrying) allows rollups to publish their data at a substantially lower marginal cost.
Activity Indicators and Revenue Distribution
The impact on network activity is quantifiable. The monthly transaction count on Ethereum has exceeded 50 million, while unique active addresses have reached multi-year highs. The base fee has stabilized within the 1 to 3 gwei range on most days, reflecting a persistent excess capacity on layer 1.
The redistribution of economic value across layers is a central metric. During 2025, Layer 2 networks generated total revenues of approximately $129 million. From this figure, L2s transferred to Ethereum’s mainnet roughly $10 million in settlement and security fees. The remainder, close to $119 million, was retained by the second-layer network operators. This asymmetry implies that Ethereum relinquished over $100 million in potential fee revenue during the same period.
Sequencer Business Model and MEV Extraction
The profitability model of L2 networks has been reconfigured following the fee reduction. The business model of sequencers—entities responsible for transaction ordering and block formation—has shifted toward capturing Maximal Extractable Value (MEV). The centralization of sequencers is a determining factor in this sector: the majority of major L2s, including Arbitrum, Optimism, Base, zkSync, Starknet, Scroll, and Linea, operate with a single centralized sequencer.
Sequencer revenue data illustrates this trend. Base, the Coinbase network, generated $75.4 million in sequencer revenue during 2025, with Coinbase operating as the sole sequencer. In May 2025, Base reported a profit margin of 98.3%, with revenues of $5.8 million. Arbitrum, through its Timeboost ordering system—which permits users to bid for sequencing priority—generated $2 million in fees during its first three months of operation. Aggregated monthly MEV across all L2 networks was estimated at approximately $8 million for September 2025.
The cost-to-revenue ratio for L2s presents a significant asymmetry: second-layer networks retain approximately $321 for every $1 paid to Ethereum for data availability.
Projections and Upward Pressure Factors
The sustainability of current fees in the $0.01 to $0.10 range per transaction faces multiple variables:
Blob Space Demand: The blob space, while currently exhibiting excess capacity, has a limit of six blobs per block. A sustained increase in rollup activity or the incorporation of new L2 networks could generate spikes in blob prices, consequently passing that cost to end-users.
Future Upgrades: The Fusaka upgrade, which includes PeerDAS, projects a capacity increase for blobs that could further reduce L2 fees by up to an additional 60%. This development, however, does not alter the fundamental structure of a data market with finite capacity.
Sequencer Decentralization: The decentralization of sequencers, a stated objective on Ethereum’s roadmap, introduces additional operational costs (consensus mechanisms, multiple validators). Projects such as Espresso Systems and Flashbots are exploring confirmation-layer models and transparency protocols that preserve current operator revenue streams. Adoption of these models may modify the cost structure of L2s.
Subsidy Models: Some L2 networks utilize subsidies through their native tokens to maintain artificially low fees and attract activity. The reduction or elimination of these subsidies would expose the actual operational cost of the network.
Impact on Ethereum’s Value Model
The fee reduction has affected Ethereum’s burn mechanism, reducing the deflationary effect on the asset. The price of ETH experienced an approximate 10% decrease during 2025, although Ethereum’s share of total DeFi value locked (TVL) increased to 64%. This metric suggests the network maintains its position as a neutral settlement layer, while economic value generation occurs in the upper layers of the stack.
The structural change in Ethereum Layer 2 fees constitutes a direct effect of a protocol upgrade with established technical foundations. The ability to maintain fees within the current range depends on the evolution of blob space demand, sequencer decentralization decisions, and the capacity of L2 networks to monetize transaction flow without exclusive reliance on subsidies. Available data indicates a permanent transformation in the network’s economics, with implications for all ecosystem participants.
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