Ethereum's L2 applications are facing higher fees as the balance between L1 and L2 has yet to be determined. Ethereum fees have increased significantly in the past month, leading to a rise in token burn and a decrease in inflation. Despite the higher fees, Ethereum continues to receive inflows and pay out staking fees to validators. L2 applications are struggling to maintain profitability while scaling Ethereum. Some believe that excessive fees on the Ethereum chain can undermine the purpose of L2 rollups. The cost of utilizing the blob economy on Ethereum is becoming expensive for L2 networks. L2 can choose to subsidize transactions or explore alternative solutions such as Eigen Layer.



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