Ethereum’s network is strained as blob transaction demand surges, pushing capacity to its limits due to the popularity of inscriptions.

Blobs are a feature that was introduced following the Ethereum network’s Dencun upgrade earlier this month.

The upgrade, which aimed to reduce the cost of Layer 2 transactions by substituting the traditional “calldata” method with blob transactions, has evidently succeeded in its objective. It has made transactions cheaper for end users by enabling Layer 2 solutions like Arbitrum, Optimism, Base, and Linea to utilize blobs for posting transactions.

Reports indicate that “the rate of blob transactions on Ethereum has surged, exceeding the network’s set capacity,” demonstrating the immediate impact of the Dencun upgrade. Adding inscriptions on blobs inspired by Bitcoin Ordinals allows users to embed unique fungible and non-fungible artifacts within these transactions.

The function has introduced a new dimension of utility for blobs, even though they are ephemeral and are removed from the network after 18 days. However, full archival nodes can retain this data indefinitely.

A recent analysis from Dune Analytics reveals a notable trend: 40% of blob transactions are now related to inscriptions. The study shows a significant utilization rate, demonstrating the highest usage among various Ethereum (ETH) L2 solutions.

Currently, the network faces a blob contention, with blobs operating at a 100% utilization rate. The situation is further compounded by a considerable backlog in the mempool, where 160 blobs await processing. Given Ethereum’s current capacity to include only up to six blobs per block, the backlog is roughly 40 times higher than the network can accommodate in a single block.