Why Ethereum Layer-2 Network Taiko Is Investing $100K Daily in Blobs


Compared to its rivals, Taiko, an Ethereum layer-2 scaling network, is investing a significant amount of money in blobs, but that is intentional.

Stay in the know on crypto by frequently visiting Crypto News Today

After being online in late May, the Taiko protocol aims to provide users with faster and less expensive transactions than those on the Ethereum mainnet, all while utilizing some of the network’s security features. Taiko has spent an astounding $900,000 on blobs in less than two weeks since going online in an effort to direct user transactions to the Ethereum network.

CryptoCaster Quick Check:

Competitors of Taiko, such the Optimism network, seldom ever spend more than $1,000 a day on Blob-related costs. Blobs were touted as a new resource for layer-2 scaling networks to post Ethereum transactions more affordably when they were first introduced in March as part of an Ethereum upgrade.

The creator of the protocol, Taiko Labs, revealed in March that it had completed a $15 million Series A financing round. By incorporating “zero-knowledge” cryptography into its design, Taiko is attempting to set itself apart in an industry where scalable networks abound and competition is fierce.

Taiko Laboratories CEO Daniel Wang sent a written comment to Decrypt stating, “Taiko just launched its mainnet, and there’s a lot to be figured out before it becomes stable.” “We anticipated using blobs more frequently than other layer-2s. This is not a bug; this is a design choice.

In order to execute batches of transactions on a different chain and publish the results back to Ethereum, Layer-2 networks frequently group transactions together. That formula, however, does not apply to Taiko’s design, since a large number of transactions are aggregated into batches in another location.

Sequencing, the process of placing transactions in order, happens on Ethereum itself instead. This method, known as “base sequencing,” according to Taiko Labs, is more decentralized than other layer-2s that rely on centralized sequencers, which are managed by a network’s development team and take a little cut of user fees.

In an interview with Decrypt, co-founder of the Bitcoin layer-2 network BOB Alexei Zamyatin said, “That sounds expensive.” It increases security, but not as much as Ethereum, and it costs a lot more than most layer-2 protocols.

A trade-off game

However, Wang said that if “Taiko is fully utilized by users,” meaning that gas fees are sustained, the expenses related to Taiko’s functionality might easily approach the break-even point.


Wang went on to say that Taiko is well aware of the advantages and disadvantages of its sequencing technique and that he expects Ethereum researchers will examine Taiko’s on-chain data in order to investigate potential enhancements that might make Ethereum more capable of supporting scaling networks of a similar nature.

According to certain Ethereum experts, like as Justin Drake, Taiko’s group is developing a novel method of decentralized sequencing that has the potential to overcome significant obstacles in Ethereum’s ecosystem.

In a written statement, he told Decrypt, “It is making a leap forward in the decentralization, credible neutrality, and composability of rollups.”

He said that fragmentation issues holding up the entire sector may be resolved if additional layer-2 networks moved the sequencing of their transactions to Ethereum itself. Currently, assets and liquidity are mainly dispersed over many layer-2s, which effectively isolates users and apps within a particular scaling solution even though they are all connected to Ethereum.

The incorporation of blobs signified a notable transformation in the way layer-2 networks on Ethereum interacted with the underlying blockchain. Layer-2s could only post bundled transactions in the form of Ethereum “calldata,” a space where data could be stored within transactions, prior to blobs becoming available as a separate fee market.

As an alternative to trafficking user transactions in bulk alongside normal Ethereum activity, blobs function something like a dedicated highway lane, where lower traffic can result in lower costs. It’s still up for debate, though, how best to bundle those transactions before they ship.

Blobs blobs blobs

Centralized sequencers can occasionally be used to bring a network to a complete stop, piercing the illusion of permissionless activity that characterizes cryptocurrency. Transactions can also be pushed back occasionally by abusing centralized sequencers. However, one of Taiko’s community supporters believes that its decentralization pledge might not be the most effective.


“Sadly, it’s kind of expensive,” the pseudonymous crypto researcher arixon.eth said on Twitter (aka X). “Because of based sequencing, we need to post a blob every 12 [seconds], and if there aren’t enough [transactions], then we just won’t fill the blobs.”

Because of based sequencing, we need to post a blob every 12s and if there aren’t enough txs then we just won’t fill the blobs

Sadly it’s kinda expensive, so we really need based preconfs

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

Wang of Taiko Labs stated that the Taiko community is “considering lowering the block proposing frequency a bit” and that altering this tempo could be a potential solution implemented shortly.

Taiko is one of the biggest users of blobs because of their continuous flow, no matter how filled they are. For instance, a well-known Dune dashboard indicates that Taiko uploaded 25% of all blobs on Ethereum on Sunday. Taiko paid around $63,000 in fees relating to blobs that day.

Taiko paid $123,000 in fees for blobs on Thursday, marking its second consecutive day with a six-figure charge total. This amounts to 73% of all costs paid for them across layer-2s. Additionally, although most layer-2s convey cost savings through reduced fees to their customers, Taiko currently pays a premium for decentralization; users are not responsible for this bill.

The procedure may be changed in the future to ensure that “blocks are missed until there are enough [transactions] in the mempool for a proposer to push a block to [Ethereum] profitably,” according to arixon.eth. “For now, it’s partially subsidized by the team.”

According to L2BEAT, during the network’s initial airdrop of TAIKO tokens, the native cryptocurrency of the network, on Wednesday, layer-2 averaged 6.42 transactions per second. Ethereum, meanwhile, recorded about 13.6 transactions every second.

The performance of Taiko’s token has been erratic thus far. As of this writing, the token’s price had rebounded to $2.45, indicating a nearly 3% fall over the previous day, according to CoinGecko. An hour after its introduction, the token crashed 40%, to $2.27 from $3.80. CRYPTOCASTER® - DECENTRALIZED FREEDOM!


e hope you enjoyed this article. Before you move on, we invite you to consider supporting CryptoCaster’s journalism.

Billionaire owners like Elon Musk, Larry Fink (BlackRock), and Jamie Dimon (JP Morgan Chase) often have a strong influence on the hidden agendas surrounding the paradigm shift brought about by cryptocurrency and emerging Web3 technologies. CryptoCaster stands apart. We have no billionaire owner or shareholders to please. Our journalism is dedicated to serving the public interest in crypto development and institutional disruptions, not profit motives.

We avoid the pitfall of much U.S. and global media, which often resorts to false equivalence in the name of neutrality and retail consumer protection. While fairness and transparency guide everything we do, we recognize that there is a right and wrong stance in the fight against fiat global banking interests and the monetary reconstruction driven by the emerging crypto ecology.

When we report on issues like the FTX, Binance, and Ripple crises, we’re not afraid to name names and uncover the truth. As a crypto sentinel, we offer a fresh, outsider perspective on global monetary disruption—something often missing from the insular American and European media bubble.

CryptoCaster’s paywall-free journalism is accessible worldwide thanks to our unique reader-supported model. This is made possible by readers like you. Your support keeps us independent, free from outside influence, and accessible to everyone, regardless of their ability to pay for news and information.

We are grateful for the ongoing monetary support from our readers. If you haven’t yet considered supporting CryptoCaster, please consider contributing just once from $1 or more in Bitcoin (satoshi) or Ether, or even better, support us monthly with a bit more. Scroll further down this page to find CryptoCaster’s wallet addresses.

Thank you.

Kristin Steinbeck
Editor, CryptoCaster

Please Read Essential Disclaimer Information Here.
© 2024 Crypto Caster provides information. does not provide investment advice. Do your research before taking a market position on the purchase of cryptocurrency and other asset classes. Past performance of any asset is not indicative of future results. All rights reserved.

Contribute to CryptoCaster℠ Via Metamask or favorite wallet. Send Coin/Token to Addresses Provided Below.
Thank you!
BTC – bc1qgdnd752esyl4jv6nhz3ypuzwa6wav9wuzaeg9g
ETH – 0x7D8D76E60bFF59c5295Aa1b39D651f6735D6413D
MATIC – 0x7D8D76E60bFF59c5295Aa1b39D651f6735D6413D
LITECOIN – ltc1qxsgp5fykl0007hnwgl93zr9vngwd2jxwlddvqt


You may also like