How to improve the imbalance between Ethereum L1 and L2

Author: cygaar Source: X, @0xCygaar Translation: Shan Ouba, Golden Finance

Currently, the relationship between Ethereum L1 and its L2 is quite unbalanced.

L2 benefits from Ethereum's security while contributing very little to ETH. I think there are two ways to restore balance:

1) Increase the minimum blob fee

I've talked about this topic in the past, but right now the blob price is essentially zero for rollups, which means Ethereum accumulates almost no value from L2 data availability costs. In the world before EIP-4844, rollups have been Ethereum's largest gas consumer, exerting strong deflationary pressure on ETH.

However, since DA blobs are essentially free, rollups no longer burn much ETH. This, combined with reduced execution activity on Ethereum L1, causes ETH to become inflationary again.

A potentially more short-term solution is to increase the base blob fee. L2s should pay a certain amount of fees to use Ethereum data availability. One could argue that increasing Ethereum data availability costs will cause L2s to move to other data availability solutions, but I think chains that truly want to inherit Ethereum's security will still pay these costs.

2) Increased L2 Usage

The current blob pricing curve is set this way because researchers predict greater demand for L2s. However, outside of a few major events (initial blob launch, blobscriptions, LZ airdrop), the cost of a blob has not deviated too much from the minimum fee.

If demand and usage of L2 increases, we may reach a state where the blob pricing curve adequately prices DA blobs, resulting in a healthy amount of ETH burn on L1. In addition to the data availability costs being sizable, gas consumption for rollup liquidations may also increase to sizable amounts (I need to run these numbers).

This is the path that will benefit the Ethereum ecosystem in the long run, but will also require intrinsic demand for L2 blockspace. We need more interesting consumer-facing applications to attract users and drive more on-chain usage. In this world, blob fees will barely stay at the minimum price, and rollups will pay sizable amounts to inherit Ethereum's security.