As Layer 1 solutions evolve, the push for decentralization naturally grows stronger.
Undoubtedly, this is why “scalability” has become a top priority for developers, with different chains vying to handle more data while maintaining security. To achieve this, adding an additional layer becomes crucial.
For Ethereum [ETH], this is where Layer 2 solutions like Arbitrum [ARB] come into play, enabling developers to create decentralized applications (dApps) without being burdened by high fees. Amidst this scenario, Ethereum’s latest BPO fork emerges as a significant upgrade.
Source: X
According to the official announcement, the fork has raised the blob limit from 15 to 21, providing Ethereum-based Layer 2 solutions more capacity to process data per block. Simply put, this translates to improved scalability and reduced costs for Layer 2 users.
Why is this significant? Layer 2 solutions not only scale Ethereum but also contribute to Ethereum’s economic ecosystem. Essentially, as the usage of Layer 2 solutions increases, a portion of the settlement fees they generate flows back to the Ethereum mainnet.
In essence, this upgrade goes beyond just scaling.
It reinforces Ethereum’s strategy of driving activity to Layer 2 solutions while still capturing value at the foundational layer. More importantly, when observing on-chain activity, this recent fork appears to be a strategic masterstroke.
Scaling Layer 2s without compromising Ethereum’s economics
The short-term impact of Ethereum’s 2025 upgrades had a somewhat bearish effect.
For instance, the adjustments in the fee structure led to a decrease in network fees, resulting in a decline of around $100 million in ETH revenue as Layer 2 earnings dropped by approximately 53%. Nevertheless, Ethereum continues to introduce forks.
The primary reason? Network utilization. As depicted in the chart below, Layer 1 application Total Value Locked (TVL) has surpassed $300 billion, indicating ongoing growth in activity and adoption, offsetting the revenue loss and keeping developers motivated.
Source: Token Terminal
Notably, this is where the recent BPO fork plays a crucial role.
With Ethereum already experiencing substantial usage, the increased blob limit allows Layer 2 solutions more capacity to process data per block, supporting even greater activity. The outcome? Processing more data enables Ethereum to recuperate lost revenue.
In essence, this strategic move paves the way for Layer 2 solutions to scale without negatively impacting Ethereum’s economic model, creating a robust feedback loop. Increased data processing leads to higher revenue, which in turn fosters more developer engagement.
Thus, Ethereum’s fundamentals take center stage in this cycle.
Final Thoughts
- Boosting the blob limit from 15 to 21 provides ETH-based Layer 2 solutions more capacity per block, enhancing scalability and bolstering on-chain activity.
- Increased adoption of Layer 2 solutions channels revenue back to Ethereum’s base layer, positioning ETH strongly for 2026.