The Ethereum blockchain just a couple weeks ago completed a landmark upgrade to create a dedicated space for storing data – known as “blobs,” under a plan to reduce fees while also relieving congestion.
But already, a new project has come along to jam up the so-called blob space, sending fees soaring and providing the nascent blob market with its first big stress test.
Ethereum gas fees for blobs spiked Wednesday after a project called Ethscriptions created a new way of inscribing data, or minting inscriptions, on the data blobs, called “blobscriptions.”
According to the Dune Analytics dashboard, the blob base fee soared to at least 582 gwei ($266) on Wednesday. As of writing on Thursday, the blob base fee had subsided to around 18 gwei ($8.69).
“As widely predicted, it looks like March 27, 2024, will be remembered as the day that the ‘blobs are free EIP-4844 launch discount’ party came to a close – courtesy of Blob Inscriptions,” Matt Cutler, the CEO of Blocknative, wrote on X.
EIP-4844 is the name of the proposal that ushered in the new blob market, incorporated as part of Ethereum’s landmark Dencun upgrade completed on March 13.
The blob space is especially crucial for the myriad layer-2 networks like Arbitrum, Optimism, Polygon and Coinbase’s Base that have been built atop Ethereum to process transactions more quickly and cheaply than is possible on the main chain. As part of the process, the layer 2s need to park reams of data on Ethereum, accounting for a huge portion of their overall costs.
In a blog post on Thursday, Ethereum co-founder Vitalik Buterin acknowledged that the Blobscriptions episode had pushed the new blob-fee market into “price discovery mode,” but he added that the data fees still remained far cheaper than they would have been under the old system of parking data as “calldata” in a regular Ethereum transaction.
“Blobs are not free, but they remain much cheaper than calldata,” Buterin wrote. “From here, important scaling work, both in increasing blob count and in improving rollups’ ability to make the best use of each blob, will continue to take place, but it will be more incremental.”
