The L2 Bottleneck
Prior to 2024, Layer 2 networks (like Arbitrum and Optimism) succeeded in lowering transaction fees by batching thousands of user actions into a single submission to the Ethereum mainnet. However, to inherit Ethereum's security, they had to post this massive batch of data as standard "CallData."
Standard CallData is stored forever by every node on the Ethereum network. Because permanent blockchain storage is incredibly expensive, the L2 networks passed these high data-posting costs back down to the user, keeping average swap fees around $0.50 to $2.00.
EIP-4844: Enter The Blobs
The Dencun upgrade, specifically EIP-4844, introduced an elegant solution: "Proto-Danksharding." Instead of forcing L2s to post data into permanent storage, Dencun created a specialized, temporary data container attached to Ethereum blocks known as a "Blob."
Blobs are fundamentally different because they carry an expiration date. Nodes only store Blob data for approximately 18 days—just long enough for anyone to verify the cryptographic proofs—before routinely deleting it to save hard drive space.
The Economic Impact on the Ecosystem
By utilizing temporary Blob space instead of permanent CallData, L2 networks experienced a 90% to 99% reduction in operational costs. This allowed L2 token swaps and NFT mints to drop to mere fractions of a cent.
This upgrade achieved Ethereum's ultimate vision: the Layer 1 acts solely as a highly secure, decentralized settlement layer, while all cheap, fast human execution migrates entirely to the sprawling ecosystem of Layer 2 solutions.