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Home»ETHEREUM NEWS»Why Ethereum Layer-2 Network Taiko Spends $100,000 Every Day on Blobs
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Why Ethereum Layer-2 Network Taiko Spends $100,000 Every Day on Blobs

By Crypto FlexsJune 8, 20246 Mins Read
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Why Ethereum Layer-2 Network Taiko Spends 0,000 Every Day on Blobs
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not Ethereum Layer-2 A network called Taiko dominates the market for data storage dedicated to so-called blobs, or Ethereum scalers. However, these efforts are costing tens of thousands of dollars every day for little-known scaler solutions, some even ranked #1 in the world. I’ve seen $100,000 appear multiple times this week.

The Taiko protocol, launched in late May, seeks to offer users cheaper and faster transactions than the Ethereum mainnet while borrowing from the network’s security elements. Since starting live, Taiko has expenditure It costs Blob a whopping $900,000 in less than two weeks to deliver users’ transactions to the Ethereum network.

Meanwhile, Taiko’s competitors, such as the Optimism network, rarely spend more than $1,000 per day in blob-related fees. Introduced in March Part of the Ethereum upgradeBlobs have been billed as a new resource in the layer 2 scaling network to make publishing Ethereum transactions more affordable.

Protocol manufacturer Taiko Labs presentation In March, it announced it had raised $15 million in a Series A funding round. Leveraging “zero-knowledge” encryption in its design, Taiko strives to differentiate its scaling design in an increasingly competitive field that includes dozens of different scaling networks.

“Taiko has just launched its mainnet and there is a lot to figure out before it becomes stable,” said Taiko Labs CEO Daniel Wang. decryption In a written statement. “We knew we would use more blobs than other Layer 2s. This is a design decision, not a bug.”

Layer 2 networks often work by stringing together batches of transactions and processing them on a separate chain before posting receipts back to Ethereum. But Taiko’s design differs from the formula under which many transactions are lumped together elsewhere.

Instead, the transaction ordering process, known as sequencing, takes place on Ethereum itself. in blog postTaiko Labs said this process, called “base sequencing,” is more distributed than other Layer 2 processes that rely on centralized sequencers. This process is controlled by the network development team and collects a small portion of user fees.

“That sounds expensive,” said Alexei Zamyatin, co-founder of Bitcoin layer-2 network BOB. decryption In an interview. “It is more secure, but not as secure as (Ethereum) and much more expensive than most layer 2s.”

trade-off game

Nonetheless, Wang said the costs associated with Taiko’s features could easily reach breakeven point even if “users fully utilize Taiko,” providing a sustainable amount of gas rates.

Wang added that Taiko is fully aware of the pros and cons associated with its sequencing method, and hopes that Ethereum researchers will study Taiko’s on-chain data to explore improvements that could enable Ethereum to better support similar scaling networks.

Some Ethereum researchers, including Justin Drake, believe the Taiko team is pioneering a new form of decentralized sequencing that could solve a major obstacle in the Ethereum ecosystem.

“We are taking another leap forward in terms of decentralization, trusted neutrality, and composability of rollups,” he said. decryption In a written statement.

If more Layer 2 networks switched the ordering of transactions to Ethereum itself, the fragmentation issues that were hampering the overall space could be resolved, he said. Currently, liquidity and assets are largely distributed across different Layer 2s, effectively siloing users and applications within specific scaling solutions, while still being all connected to Ethereum.

For Ethereum’s layer 2 network, the introduction of the blob marked a major change in how the protocol interacts with the underlying blockchain. Before Blob was available as a separate fee marketplace, Layer 2 could only publish bundled transactions in the Ethereum “calldata” format, which is the space for data to be included within the transaction.

Instead of massively trafficking user transactions alongside regular Ethereum activity, blobs can act as dedicated lanes on the highway, reducing congestion and thus costs. But the best way to package those deals before shipping is still up for debate.

lump lump lump

In some cases, a centralized sequencer may be utilized to bring the network to a halt, piercing the veil of unauthorized activity synonymous with cryptocurrency. Sometimes a centralized sequencer Abused to delay transactions do. However, Taiko’s efforts at decentralization may not be the most efficient, according to one of its community advocates.

“Sadly, it costs some money,” said anonymous cryptocurrency researcher arixon.eth. said On Twitter (aka X). “Because of the underlying sequencing, we have to publish a blob every 12 (seconds), and if there aren’t enough (transactions), we won’t populate the blob.”

Due to the underlying sequencing, a blob needs to be published every 12 seconds and will not populate the blob if there is not enough transmission.

Unfortunately, they are expensive, so based presets are a must.

— arixon.eth (@arixoneth) June 1, 2024

Changing that rate could be a potential solution that could be enacted soon, Taiko Labs’ Wang said, noting that the Taiko community is “considering slightly lowering the block proposal frequency.”

Regardless of how full it is, the constant flow of blobs makes the Taiko a top user. For example, according to popular media outlets, on Sunday Taiko published 25% of all blobs on Ethereum. Dune Dashboard. That day, Taiko spent nearly $63,000 in Blob-related costs.

On Thursday, Taiko paid $123,000 in fees for Blob. This represents 73% of all costs paid for blobs across Layer 2. This marks the second consecutive day of six-figure fee tallies. And while most Layer 2s pass on cost savings to users through lower fees, for now the premium Taiko pays for decentralization is not a cost users should bear.

“For now, the team is partially subsidizing it.” arixon.eth saidHe added that the process may be modified in the future “to ensure that blocks are missed until there are enough (transactions) in the mempool for the proposer to profitably push the block to (Ethereum).”

During the first airdrop of TAIKO tokens, the network’s native cryptocurrency, on Wednesday, Layer 2 reportedly recorded an average of about 6.42 transactions per second. L2Beat. Meanwhile, Ethereum registered approximately 13.6 transactions per second.

The performance of Taiko tokens so far has been turbulent. After plummeting 40% within an hour of launch, falling from $3.80 to $2.27, the token price has recovered to $2.45 as of this writing, down nearly 3% over the past day. CoinGecko.

Editor: Andrew Hayward

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