150 Days After Dencun: Exploring the Economic Impact of Blobs on Rollups and the Tradeoff Made by Ethereum

Key Takeaways

• There have been 2,225,958 blobs purchased at an average cost of $1.59/ blob and 1,104,315 blob carrying Layer 1 transactions at an average cost of $5.22/ transaction in the 150-day period following the implementation of EIP-4844 (as of August 10, 2024). In total, Ethereum has generated 2,692.39 ETH and $9,318,794 in revenue from blobs. 2,408.41 ETH or 89.45% of total fee revenue from blobs has been burned; the rest went to validators in the form of priority tips.

• Rollups have purchased approximately 285 gigabytes of blob data in total and have only used about 76% of their capacity. Blobs have a fixed size of 128KB and a maximum of 6 blobs can be processed in an Ethereum block. The data contained in each blob is ephemeral and automatically pruned from most Ethereum nodes after a period of roughly two weeks.

• Rollups have spent a total of $3,549,430 on blobs, which puts the cost at $16,473 per gigabyte used and $12,458 per gigabyte purchased. These figures span the period starting March 13, 2024 to August 10, 2024.

• Rollup costs came down substantially, with Arbitrum, OP Mainnet, Base, zkSync, Linea, and Scroll paying a combined average of $556.4k in operating costs daily post-Dencun. This compares to a daily average of $1.07m in the 150 days leading into Dencun under the use of calldata, an alternative way to store arbitrary data on Ethereum.

• Rollup margins improved on a relative basis, with optimistic rollup margins (using Base, OP Mainnet, and Arbitrum as a proxy) strengthening from 22.65% in the 150 days leading into Dencun to 92.3% in the 150 days after Dencun; and zero-knowledge rollup margins (using zkSync, Scroll, and Linea as a proxy) expanding from 27.27% before Dencun to 66.7% after.

• Rollup margins in absolute terms have improved after Dencun despite fee revenues dropping 42% from pre-Dencun daily values. Rollups are earning more bottom-line income than they were before Dencun.

• Activity on the leading L2s picked up immediately post-Dencun. However, the rise in transaction counts has been met with rising failure rates. The majority of the failed transactions stem from high activity addresses, likely bots. Low fees on L2s could be driving increased bot activity. Average users that are not sending high volumes of transactions are experiencing failed transaction rates at a level only slightly more elevated than pre-Dencun levels.

• Ethereum is seeing significantly less revenue generated and ETH supply burned post-Dencun. Total revenue earned is 69% below that of the average 150-day rolling sum before the upgrade; ETH burned is 84% below that of the average 150-day rolling sum before the upgrade.

Key Definitions

• Blob - A binary large object or "blob" is a temporary data storage space for rollup data on Ethereum's consensus client. Blobs were introduced as part of EIP-4844. The storage can be used for any kind of data just like the previously relied on calldata space before EIP-4844. However, Ethereum developers intend for blobs to be used by rollups for storing transaction data. There is a target rate of three blobs per Ethereum block and max number of six. "Blob sidecar" is used in reference to the object wrappers for blobs that carry transaction data in a block. "Blobdata" is used in reference to the data that is stored in a blob.

• Blob Carrying Transaction - Blob carrying transactions, or "type-3" transactions, are EIP-4844 transactions that include a reference to a blob, but not the blob itself. The blobs are gossiped through a consensus client blob sidecar and are not available to the execution client. Blob carrying transactions are handled on Ethereum's execution layer (Layer 1), and include the fees associated with blobs in addition to the typical base and priority fees of Ethereum transactions.

• Blob Capacity - the maximum amount of blobdata that can be stored in a blob. Each blob can hold up to 128 KB of data. Blob purchasers must pay for the full capacity of the blob independent of if they fill it or not.

• Blob Capacity Used - the share of each blob's 128 KB capacity a rollup actually fills with batched transaction data.

• Calldata - a dedicated data storage space attached to every Ethereum transaction. This dedicated space can be used to store any kind of data and was commonly used by rollups as the space to store their transaction data before EIP-4844. Some rollups still use calldata after EIP-4844.

• Batch- a bundle of Layer 2 transactions that are "rolled up" together and submitted as a single transaction to Ethereum. Bundling transactions into a batch is how Layer 2 (L2) rollups reduce fees for Ethereum users. Batches are mostly stored in blobs today and in transaction calldata previously.

• Ethereum Execution Layer - also referred to as Ethereum Layer 1 (L1), the execution layer is the part of the Ethereum network that processes transactions and executes smart contracts. It also contains the EVM, the execution engine of Ethereum that enforces rules and pricing for all on-chain operations.

• Ethereum Consensus Layer - the part of Ethereum that implements the proof-of-stake (PoS) consensus algorithm, which enables the network to achieve agreement based on validated data from the execution client. The consensus layer is where blobdata is stored.

Background on EIP-4844

Ethereum's Dencun upgrade was successfully activated at 1:55pm UTC on March 13, 2024 (beacon slot 8,626,178 and epoch 269,568). In the upgrade's collection of nine Ethereum Improvement Proposals (EIPs) is EIP-4844. This EIP offers a solution to reduce operating costs for Ethereum rollups through the use of blobs and type-3 transactions. Blobs and type-3 transactions serve as cheaper data storage than calldata and type-2 transactions for rollups.

Unlike calldata which is stored on Ethereum's execution layer, Blobdata is temporarily stored on the consensus layer and made inaccessible for smart contracts to query through the Ethereum Virtual Machine (EVM). This reduces the computational burden, and consequentially the cost, of storing rollup batch data and posting it to Ethereum by reducing rollups' reliance on calldata and Ethereum's execution layer. Blobdata is then posted to Ethereum through type-3 transactions which contain references to the blobs that are stored on the consensus layer, but not the blobs themselves or the data they contain.

The total fee for storing rollup data in the calldata of a transaction and posting them with type-2 transactions is calculated as:

(Base Fee * Calldata Gas Used) + (Priority Fee * Calldata Gas Used)

By comparison, the total fee associated with type-3 transactions containing blobdata on Ethereum is calculated as:

(Blob Base Fee * Blob Gas Used) + (Base Fee * Calldata Gas Used) + (Priority Fee * Calldata Gas Used)

Despite the addition of blob base fees to the total fee calculation, type-3 transactions are generally cheaper than type 2 transactions because less call data gas is used in type-3 transactions and the fees associated with blob gas is generally cheaper than the fees associated with calldata gas.

Blobs have their own fee market independent of that of any Ethereum L1 transaction type. The blob fee market has its own parameters for setting base fees that are only influenced by demand for blobs in the prior block. The activity that takes place on Ethereum L1 (e.g. users swapping on dexes) does not have an impact on the cost of blobs. Activity on Ethereum L1 does impact the base fee of blob-carrying transactions but it does not impact the blob base fee.

The base fee for blobs in its independent market is set to 1 wei and scales up as demand for them climbs above the target number per block towards the maximum. In units of gas, a single blob requires 131,072 gas. At an ETH price of $3,000, this means the base fee for a blob could be as low as 0.000000000000131072 ETH (12 zeros) or $0.00000000039322 (nine zeros). So, the first leg of the type-3 transaction fee calculation above can be effectively free at times.

This report examines the state of Ethereum blob use from the storage and posting perspectives on both the consensus and execution clients, and EIP-4844's impact on the economics of rollups. It does not include any analysis on the other eight EIPs included in the Dencun upgrade.

Blobs on Ethereum's Consensus Layer

Starting with the blob landscape from the perspective of Ethereum's consensus layer, this section includes information about the number of blobs purchased, the total spends by rollups on consensus layer blobs, and the amount of blob capacity purchased and used.

The table below offers a high-level overview of the top 10 Ethereum rollups by number of blobs purchased. Cumulatively, they purchased 1,939,657 blobs (248.2 gigabytes of blob capacity purchased representing 87% of total blob demand) and sunk $2.1m (603.6 ETH) in blob spend in the 150-day period since EIP-4844 activation. Paradex, StarkNet, and Arbitrum used the greatest share of blob capacity purchased at an average usage rate of 95.23%. Base has spent the most on blobs over this time, spending $811k or 232.5 ETH across 619,516 blobs.

The cost of a single blob is calculated in units of ETH with the following formula, where Blob Gas Used is 131,072 gas:

(Blob Base Fee * Blob Gas Used) / 1e18

Blob costs can also be calculated in USD by multiplying the outcome of this formula by the price of ETH at the time of blob inclusion in an Ethereum block. This is the price of ETH when the blob carrying transactions are executed on-chain. As explained in the previous section of this report, the total cost of using blobs is the sum of all three components of the type-3 transaction fee calculation above. The cost of a blob itself is only the first leg of the total transaction fee calculation. The other two values tied to the cost of the blob carrying transactions will be covered in more detail in the next section of this report.

Blobs have seen consistent demand from rollups between 15,000 and 20,000 blobs per day since May 28, 2024. This date is significant as it marked the launch of Taiko, a based rollup. Based rollups are unique in that transactions on them aren't confirmed until they are confirmed on Ethereum L1. This requires them to continuously purchase blobs to keep the chain functioning. They differ from optimistic and zero-knowledge rollups which offer soft confirmations of transactions on the rollup and then confirms them on the L1 at a future time. This allows for more flexibility by the sequencer on the number of blobs purchased and L1 transaction frequency. Despite being a relatively new rollup, Taiko ranks as the third largest spender for blobs on the consensus layer side and the largest spender overall for blob carry transactions on the execution layer side.

Base and Taiko are the top two biggest daily purchasers of blobs, averaging a combined 8,667 blobs purchased per day (47.4% of all demand for blobs) since June 1, 2024. Base averaged 5,094.5 blobs purchased per day and Taiko 3,572.5 over this period. Despite launching 75 days after the introduction of blobs, Taiko is still one of the top three rollups by number of blobs purchased since Dencun.

From a data demand perspective, rollups have been consistently purchasing between 2 and 2.5 gigabytes of blobs per day since June 1, 2024. However, they have only been filling the blobs they purchase with 1.5 to 2 gigabytes of data. This highlights that rollups have only been using 71.91% of the capacity they have been paying for over this period.

June 20, 2024 and June 21, 2024 marked the two highest days of blobdata usage at 2.66 and 2.75 gigabytes respectively. June 20, 2024 was the Layer Zero airdrop on Arbitrum, which sent activity on Arbitrum soaring. The period between March 27, 2024 and April 3, 2024 marked the greatest demand for blob capacity at around 2.7 gigabytes per day. Blobscriptions were popular over this period, which generated artificial demand for blobs. Blobscriptions allow users to embed arbitrary data into blobs that is unrelated to their intended use of carrying rollup transaction data.

In the 150 days following Dencun, there has been an average of 21.1% of daily unused blob capacity. The chart below highlights the composition of blob capacity on a daily basis between capacity filled by rollups and unused capacity.

There have been nine noteworthy days when rollup blob spends exceeded $100k per day. These days were marked by the Blobscription mania of late March to early April and the day of the Layer Zero airdrop on Arbitrum on June 20. These nine days combined for $3,542,579 in total blobs spend from rollups at an average daily spend of $394k per day (815,714% higher than the average of all other days). Moreover, these nine days account for 99.8% of total blob spend since Dencun went live of $3,549,430. Excluding these outliers, rollups spend a combined average of just $48.25 per day on blobs.

Also note, these days were marked by an average of 2.9 blobs per Ethereum block, which is 52% below the max number of blobs per block of six, 4% below the target number of three, and 40% higher than the daily average number of blobs per block since EIP-4844 launched of 2.06. This highlights costs go parabolic when demand for blobs consistently meets or exceeds the target rate.

Blob Costs Per Gigabyte

Another way to measure the cost of blobs is based on the amount of space purchased and ultimately filled by rollups. Using data on rollups' daily blob spend and blob usage, we can get a sense of how much it costs to purchase and fill 1GB of blob space. The chart below takes the daily blob spend of rollups and sets it over the daily amount of blob capacity demanded and the amount of blob capacity used to measure the cost per gigabyte of blobs.

In the height of the Blobscription mania, the cost of blobs reached $503k per gigabyte of blob capacity used and $207k per gigabyte of blob capacity purchased. The day of the Layer Zero airdrop on Arbitrum saw blob costs reach $410k per gigabyte of capacity used and $330k per gigabyte of capacity purchased. Note, the per unit cost of capacity used is greater than the per unit cost of capacity purchased because rollups did not use the full capacity of blobs in aggregate on these days.

Through the Blobscription mania, blob capacity used averaged just 50%. At times, up to 63% of blob capacity purchased was left unused by rollups. During the Layer Zero airdrop day on June 20, 19.5% of blob capacity went unused by rollups.

In total, rollups have spent $3.55m and 1,020 ETH on consensus layer blob spend in the 150 days since Dencun went live. ETH spent on blobs is removed from circulation, like how base fees of transactions executed on Ethereum's execution layer are burned. The values below represent the amount of ETH removed from circulating supply due to consensus layer blobdata activity. It does not reflect the amount of ETH burned through blob carrying transactions on the execution layer - more on this will be covered in the next section of the report.

In aggregate, since the introduction of EIP 4844, rollups have spent $12,458 per gigabyte of blob space purchased and $16,473 per gigabyte of blob space used.

In the next section of the report, we analyze the blob landscape from the perspective of Ethereum's execution layer. This includes components like the number of blob carrying transactions executed, the cost at which they were executed for, and the average number of blobs per blob carrying transaction. Note, these values exclude the cost of blobdata in the blob carrying transactions and focus on the values from the last two components of the total blob fee calculation, which are:

(Base Fee * Calldata Gas Used) + (Priority Fee * Calldata Gas Used)

Analysis on the cost differences between type-3 transactions including blobdata fees vs. type-2 transactions with rollup transactions written to calldata will be shared later in this report.

Blob Transactions on Ethereum's Execution Layer

The table below offers a high-level overview of the top 10 Ethereum rollups by the amount of ETH spent on blob carrying transactions on Ethereum's execution layer. Taiko has spent the most on blob carrying transactions by a substantial margin, sinking 631.67 ETH that resulted in 423.58 ETH being burned from base fees ($2.2m total). zkSync has spent the most on blob carrying transactions on a per transaction basis at 0.0045672 ETH per transaction ($15.78 per transaction).

Rollups have been consistently executing 8,000 to 10,000 blob carrying transactions per day since May 28, 2024 at an average cadence of 2.02 blobs per Ethereum transaction (total number of blobs purchased / total number of blob carrying transactions). Taiko posts the most blob carrying transactions to Ethereum daily, averaging 3,558 transactions per day.

Blob carrying transaction spend across all rollups has averaged $34.1k daily since the introduction of blobs, and $41.8k daily since Taiko launched on May 27. It's important to note that throughout this period gas prices for all Ethereum transactions have been trending downwards. Average daily gas price used was at 3.5 gwei as of August 10, 2024, which is 67.2% below the 356-day daily average and 94.5% below the average gas price on March 13, 2024. In total, rollups have spent $5.77m on blob carrying transactions since Dencun went live.

Blob-Carrying Transaction Spend by Fee Type

The majority of the execution layer costs paid have been base fees, which represent 83% of the total fees paid. Base fees on Ethereum are burned and permanently removed from the circulating supply, while priority fees are paid to validators as "tips." Since the launch of Dencun, validators have received $974.8k in priority fees from rollups. Taiko has paid the most priority fees at $719.7k. This makes up 74% of total priority fees paid by all rollups. Of Taiko's total spend on execution layer blob costs, 33% is spent on priority fees. It is paying a greater portion of its total execution layer blob costs in priority fees than all other rollups. StarkNet spends the least on priority fees. Of StarkNet's total spend on execution layer blob costs, 0.49% is spent on priority fees.

Measuring base and priority fees paid in ETH terms tells us precisely how much ETH has been burned through blob carrying transactions. In total, 1,389 ETH has been burned through the execution of blob carrying execution layer transactions. 283.97 ETH in priority fees has been paid to validators as tips.

More on ETH burns and revenue captured by validators will be covered in the following section of this report.

Impact on Ethereum Validators and ETH Supply

Due to the introduction of blobs, there is less total revenue generated on Ethereum and ETH burned from rollup activities. The following analysis highlights 1) the change in ETH burned, 2) revenue paid directly to validators, and 3) total revenue captured by Ethereum before and after the implementation of EIP-4844.

To do this, we compare the rolling 150-day sums in each of these data points leading into EIP-4844 to the outright sum of the same metric 150-days after EIP-4844. The 150-day rolling sums begin on January 1, 2022, so it captures pre-Dencun values from as early August 5, 2021. The analysis captures data from 24 different rollups. As mentioned earlier, the blob and base fees of type-3 transactions are burned, and priority fees are paid as tip revenue to validators. Pre-Dencun values exclude revenue contributions and ETH burns from zero-knowledge (ZK) proofs, which is a type of data stored on Ethereum by ZK rollups. Our analysis only includes protocol revenue and burns from transaction batch commits by optimistic and ZK rollups. Note, pre-Dencun values stop on March 13, 2024 (the day EIP-4844 went live).

The chart below compares the total amount of ETH burned in the 150-day period following the introduction of blobs to the historical 150-day rolling sum of ETH burned from rollup calldata batch commits pre-Dencun. While calldata is still relied on by some rollups post-Dencun, it is used by rollups to a much lesser extent. An estimated 39.69 ETH in Ethereum protocol fee revenue was generated in the trailing 30-day period ending August 10, 2024 from calldata usage by rollups, compared to 13,163 ETH in the 30-day period leading into Dencun.

The amount of ETH burned from the base and blob fees of type-3 transactions following Dencun is lower than any of the 150-day rolling sums of data posting under the use of calldata since January 1, 2022. 2,408 ETH has been burned since March 13, 2024 compared to a minimum 150-day rolling sum of 3,286 ETH leading up to Dencun. The average 150-day rolling sum of ETH burned under calldata batch posting up to EIP-4844 was 15,052 ETH. This shows that significantly less ETH is being burned from rollup transaction batch commits on Ethereum after the activation of EIP-4844.

The next chart highlights the value paid directly to validators before and after EIP-4844. In total, $974,876 has been paid to validators by way of type-3 transaction priority fees. This is a level seen in May 2022 and June 2023 using the 150-day rolling sum of priority fees from calldata batch commits before the use of blobs. Calldata batch commits generated an average 150-day rolling sum of $1.196m in priority fees under the use of calldata. Validators are earning less daily through priority fees from type-3 transactions containing blobdata than type-2 transactions containing calldata.

Lastly, we can compare the total revenue earned from blobs to the total revenue earned from calldata batch commits.

The calculation for the total revenue earned from blobs is:

(Blob Base Fee * Blob Gas Used) + (Base Fee * Calldata Gas Used) + (Priority Fee * Calldata Gas Used­)

The calculation for the total revenue earned from calldata batch commits is:

(Base Fee * Calldata Gas Used) + (Priority Fee * Calldata Gas Used­)

Ethereum has earned $9,318,794 in total revenue from blobdata and type-3 transaction base and priority fees, compared to an average 150-day rolling sum of $29.92m in total revenue from type-2 transactions and the use of calldata.

Contributions to L1 by Rollup Type

The table below offers a breakdown of the top 25 rollups used in the above analysis by type and their respective contributions to Ethereum protocol fee revenues post-Dencun. In total, we evaluated 18 optimistic rollups, 6 zero-knowledge rollups, and 1 based rollup.

Notably, the only based rollup in our analysis, Taiko, contributed 74% of all tips paid to validators and more than a quarter of all ETH burned under EIP-4844. Together, these 25 rollups make up 81% of ETH burned, 98% of tips paid to validators, and 83% of total revenue generated from all blobs and type-3 transactions executed on Ethereum.

Impact on Ethereum Rollups

The goal of EIP-4844 was to reduce the operating cost of rollups to make them more affordable to operate and use. The following section assesses the impact the upgrade had on rollup economics and activity. It uses Arbitrum, Base, OP Mainnet, Linea, Scroll, and zkSync for the analysis. These are the top three optimistic and top three ZK rollups by total value locked on the network.

High-Level Economics

To start, the costs for rollups to operate came down substantially after EIP-4844 went live, with the exception of the blopscription mania, Layer Zero airdrop, and August 5 market volatility days. The chart below looks at the daily total costs incurred by rollups, including that of blobdata, posting the blobdata via type-3 transactions, calldata batch commits, and zero-knowledge proofs (in the cases of Scroll, Linea, and zkSync). Since the activation of blobs, including the outlier days and the time it took rollups to implement the use of blobdata, these rollups have paid an average of $556.4k in operating costs daily. This compares to daily averages of $1.9m in the 30-day period, $1.27m in the 90-day period, and $1.07m in the 150-day period leading into the implementation of EIP-4844.

For more on the cost savings of blobs relative to calldata, see this Galaxy Research Dune query, which compares the actual cost of blobdata to what it would theoretically cost if the same blobdata was posted to Ethereum through calldata.

The reduction in operating costs has been met with a decline in revenues captured by these rollups. The day of Layer Zero's airdrop on Arbitrum and August 5, 2024 were notable exceptions. Arbitrum captured the majority of the revenues on these outlier days. The combined total revenue of the six rollups was $6.09m on these two days, with Arbitrum capturing $4.63m (76%).

Since the activation of blobs, including the outlier days and the time it took rollups to implement the use of blobdata, these rollups have earned an average of $691.3k in revenue daily. This compares to daily averages of $2.33m in the 30-day period, $1.46m in the 90-day period, and $1.2m in the 150-day period leading into the implementation of EIP-4844.

While revenues have declined, the margins of these rollups improved in absolute terms. The chart below shows the bottom-line margin of the observed rollups, calculated as Revenue Less All Operating Costs. Base was the only optimistic rollup in our analysis to have a day of net losses since EIP-4844 went live. On June 20, 2024, the rollup lost $175k. The losses were fully recovered plus some in the three days that followed. Scroll was the only ZK rollup to have negative margin days. On March 26, 2024, the rollup lost $25k but generated $150k in net margin the following day on March 27, 2024. It also lost $6.7k on May 28, 2024, $8k on June 5, 2024, and $9k on June 6, 2024.

Since the activation of blobs, including the outlier days and the time it took rollups to implement the use of blobdata, these rollups have taken home an average of $553k daily. This compares to daily averages of $685k in the 30-day period, $389k in the 90-day period, and $324k in the 150-day period leading into the implementation of EIP-4844.

Rollup margins expressed as a percentage show the relative improvement made in the share of their revenue going towards operating costs. Rollups are keeping more of the revenue they earn after EIP-4844 than before. The chart below separates optimistic and ZK rollup margins to highlight how the use of blobs has impacted each rollup type's profit margin. The average daily percentage margin of optimistic rollups since March 13, 2024, has been 92.3%; the average daily percent margin of ZK rollups has been 66.7% since the same time. The additional costs around proofs paid by ZK rollups dampens their margins on a relative basis.

More detail on the economic impact of EIP-4844 on rollups can be found on this Galaxy Research Dune data dashboard.

Rollup Activity Before and After EIP-4844

User activity on the six observed rollups picked up immediately after the activation of EIP-4844 and has sustained an elevated amount of use through the 150 days that followed.

The chart below highlights the immediate impact of EIP-4844 on the transaction activity of these rollups. From the period starting December 1, 2023, and ending March 12, 2024, the rollups averaged 3.285 million transactions daily compared to 6.656 million transactions in the 150 days that have followed EIP-4844. This indicates transaction activity more than doubled. An identical trend is observable across all Ethereum rollups.

The decline in costs to use these networks is the main reason for the increased usage of rollups post-Dencun. The chart below highlights the significant reduction in transaction costs on each of the networks.

Arbitrum saw the greatest reduction in transaction costs using the daily median transaction fee. The network averaged a median cost per transaction of $0.37 from December 1, 2023, to the activation of EIP-4844; in the 150 days following EIP-4844 this rate has fallen 94% to $0.02. Scroll saw the lowest decline in median transaction fees of 58%, falling from $0.74 to $0.31.

The rise in activity on the observed rollups has been met with rising transaction failure rates in aggregate. Notably, Arbitrum, Base, and OP Mainnet have seen significant increases in the share of transactions failing on the networks. Base reached as high as a 21% failure rate, Arbitrum 15.4%, and OP Mainnet 10.4% 150 days post-Dencun using the seven-day moving average of daily failure rates.

The failure rates are largely being driven by high activity addresses, likely bots. This Galaxy Research Dune query highlights the failure rates of addresses attempting 100 or more transactions per day. The failure rates for these addresses reached as high as 41.6% on Base, 20.87% on Arbitrum, and 12.85% on OP Mainnet since Dencun activation using a seven-day moving average. In comparison, failure rates of low activity addresses attempting five or less transactions daily experienced a maximum of 4.02% across all of the observed networks over the same period using the same seven-day moving average.

OP Mainnet has a lower transaction failure rate among low activity addresses than it did on March 13, 2024, while Base's transaction failure rate among low activity addresses is only marginally higher since the same time. Curiously, the transaction failure rate of low activity addresses on Arbitrum increased 545% post-Dencun. The decline in rollup transaction costs and the concentration of transaction failures from high activity addresses instead of low suggests that bot activity is the likely source of the rising failure rates on these rollups post-Dencun.

More detail on the impact of EIP-4844 on rollup activity can be found on this public Galaxy Research dashboard.

Conclusion

The introduction of EIP-4844 and blobdata greatly improved the economics of operating and using Ethereum rollups. This development, however, has shifted some revenue capture from Ethereum L1 and the ETH burn rate to rollup operators, also known as sequencers.

Under the previous calldata model for data availability (DA), Ethereum was capturing up to 77% of the value generated by rollups. With the implementation of EIP-4844, Ethereum now captures 8% of the value generated by optimistic rollups and 33% by ZK rollups, in aggregate (1 - Rollup Percent Profit Margin). This transition aligns with Ethereum's mission to become an efficient DA layer, as rollups are the primary locus of fee-paying users and transaction activity.

Despite the cost improvements for Ethereum DA, it remains expensive in aggregate, costing rollups $16,473 per gigabyte of blobdata used and $12,458 per gigabyte purchased. High costs are driven by a few days when blob costs surged. When blob demand is low, costs are negligible. Excluding blob costs, type-3 transactions only cost on average $5.22 per transaction. There is concern that costs could escalate if the demand for blobs increases and remains high. One possible solution could be raising the maximum and target number of blobs per Ethereum block.

All the data used in this report was pulled from a public Dune dashboard published by Galaxy Research. It can be found here.

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