Ethereum (ETH) must address scalability constraints to maintain the growth of Layer 2 (L2) networks and avoid future transaction bottlenecks, according to the Decentralized Finance (DeFi) Report.

The company stated in a recent report that as Layer 2 networks expand in user adoption and transaction rates, competition for Ethereum's limited object space may increase costs and undermine the broader scalability roadmap of the network.

Ethereum supports Layer 2 networks through "blobs," which are low-cost data storage mechanisms introduced with Ethereum Improvement Proposal 4844 (EIP-4844). However, the current capacity of three targeted blobs per block may become insufficient.

Even after the upcoming Pectra upgrade, which will raise the target to six blobs per block, forecasts indicate that rapid Layer 2 expansion may exceed the available bandwidth.

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