HomeCryptoEthereumNew scaling milestone for the Ethereum (ETH) blockchain

New scaling milestone for the Ethereum (ETH) blockchain

In recent days, an important milestone has been reached regarding the scaling of the Ethereum (ETH) blockchain and its layer-2 and layer-3.

Just yesterday, in fact, the all-time high of the number of daily transactions recorded overall on Ethereum’s layer-1 and all its upper layers was registered. 

According to the data from L2BEAT, the average daily TPS on Ethereum’s layer-1, that is, its actual blockchain, has settled at a modest 13 tx/s, but the overall figure, which also includes the upper layers, has approached 246 tx/s.

Just think that seven days ago the average TPS on layer-1 was practically the same, but with the upper levels it was just 123 tx/s, or about half. At the beginning of the year, it was only 73 tx/s, while the one on layer-1 has always been more or less around 13. 

The second layer and the scaling of the Ethereum (ETH) blockchain

What is making the most difference is the layer-3 Xai, a scaling solution for gaming created by Offchain Labs, the company behind Arbitrum One.

Just yesterday it recorded a TPS of over 101 tx/s, followed far behind by layer-2 Base at about 33 tx/s. 

It should be noted that there are two other upper layers that have recorded a higher daily average TPS than Ethereum, namely Arbitrum, with more than 20 tx/s, and Proof of Play Apex with almost 16.

Moreover, both Taiko and Blast are also recording interesting numbers, because they are both above 11 transactions per second. 

L2BEAT monitors as many as 74 chains, including layer-1 (Ethereum), layer-2, and layer-3, although for about ten of these it is not managing to collect data. 

In the last twelve months, the daily average TPS of Ethereum has remained more or less constant around 12 or 13 tx/s, while the overall TPS was just 30 tx/s, which is slightly more than double that recorded on layer-1. 

As recently as February of this year, the overall TPS was still only at 40, but after the Dencun update in March that reduced fees on the upper layers, it skyrocketed first to 100 and then recently well beyond 200 tx/s. 

This makes it very clear that by now the majority of transactions within the Ethereum ecosystem do not occur on layer-1 (the native Ethereum blockchain), because there they are relatively slow and expensive, but on the upper layers where they are faster and above all much more economical. 

The fees

The average cost per transaction on the Ethereum blockchain yesterday was over $2. Five days ago, however, it was over $6, and a good ten days ago it had risen to almost $9. Not to mention the fact that on March 5th it skyrocketed to over $30.

Instead, according to the data from L2BEAT, yesterday on Base the average cost per transaction was 0.4 thousandths of a dollar, or 0.0004$. 

On Optimism it was 1 thousandth, and on Arbitrum slightly above 2 and a half thousandths. 

The difference is truly remarkable, and this is due to the fact that on layer-1 it is not possible to reduce costs by increasing TPS, while the upper layers can scale much more easily. 

It should be remembered that the average cost of a single transaction depends on the level of network congestion, so a network that supports higher TPS can clear the queue of pending transactions much faster, greatly reducing congestion. 

Instead, on layer-1 like Ethereum and Bitcoin it is not possible to increase the number of validated transactions per second, making it very difficult to reduce congestion in case of many requests.

The price of ETH

This remarkable increase in on-chain activity has not, however, had positive effects on the price of ETH, also because ETH is used to pay the cost of transactions on layer-1.

About ten days ago it had risen above $3,800, but starting from Friday, June 7, it began to fall. 

First it went back to $3,600, and then it dropped below $3,500.

In particular, last Friday for a brief moment it had also dropped below $3,400, but at that point, it recorded a quick rebound that in fact then brought it back around $3,500. 

The current price levels are in line with those of mid-April before the early sell-the-news on Bitcoin was triggered about a week before the halving.

At that time, the price of ETH dropped to $3,000, and then fell below $2,900 during the month of May. 

It then recovered after the news of the possible approval of spot ETH ETFs in the USA (which later happened), but since we are still waiting for their actual debut on the stock exchange, there is still a lot of calm and uncertainty at the moment. 

It is worth noting that the current price of ETH is still 28% lower compared to the all-time highs of late 2021, while for example that of BTC is -% from the all-time highs of March. 

Marco Cavicchioli
Marco Cavicchioli
Born in 1975, Marco has been the first to talk about Bitcoin on YouTube in Italy. He founded ilBitcoin.news and the Facebook group" Bitcoin Italia (open and without scam) ".