The future of Ethereum rests on this gross-looking chart.
🧵
Why are "blobs" (data availability submissions) from L2s the future of Ethereum?
Because Ethereum disrupted itself via the L2 roadmap & EIP4844.
As a result, base fees are down 99% from their peak in late '21 and 92% from the *bottom* of the last bear market in '22 (prior to EIP4844).
We should expect this trend to continue as L2s scale.
Priority Fees are also at their lowest level over the last 4 years as more execution activity moves to the L2s post EIP4844.
Again, we should expect this trend to continue as more execution activity moves to L2s.
Unsurprisingly, MEV is also down on the L1.
As more user activity moves to L2, MEV will follow.
This is taking $ out of Ethereum validators' stakers pockets (who earn about 60% of MEV today).
Fewer payments to validators from priority fees and MEV means token incentives/issuance are now rising.
Ethereum's annualized inflation (based on the past 30 days) is now .74%, and it looks like it's going to exceed BTC anytime now.
So, what now?
Ethereum HAS to scale its "blob fee" offering for L2s.
But if the L2s scaled just 2.5x in terms of tx/second right now, they would overwhelm the L1, causing L2 transactions to spike to $.40.
Big challenges ahead.
Which makes it difficult for investors to forecast future value accrual to ETH.
That's why we've been laser-focused on this at The DeFi Report
We shared a deep-dive breaking it all down for 9.5k readers this morning.
If you'd like to check out the latest research, you can do so here: thedefireport.io/research/blob-…
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