The Ethereum network is experiencing strain as the demand for blob transactions skyrockets, pushing its capacity to the brink due to the widespread adoption of inscriptions.

Blobs, a feature introduced following the recent Dencun upgrade to the Ethereum network, have become a focal point of transaction processing. This upgrade, designed to reduce the cost of Layer 2 transactions by replacing the traditional "calldata" method with blob transactions, has effectively achieved its goal. By enabling Layer 2 solutions like Arbitrum, Optimism, Base, and Linea to leverage blobs for transaction posting, the upgrade has made transactions more affordable for end users.

Recent reports indicate that the rate of blob transactions on Ethereum has surged, surpassing the network's capacity limits—a direct consequence of the Dencun upgrade. By incorporating inscriptions on blobs, inspired by Bitcoin Ordinals, users can embed unique fungible and non-fungible artifacts within these transactions.

This functionality has unlocked a new level of utility for blobs, despite their ephemeral nature and removal from the network after 18 days. However, full archival nodes have the capability to retain this data indefinitely.

According to a recent analysis by Dune Analytics, there has been a noticeable trend: 40% of blob transactions are now associated with inscriptions. This data highlights a significant utilization rate, with Ethereum's Layer 2 solutions exhibiting the highest usage among various Ethereum (ETH) L2 solutions.

Presently, the network is grappling with blob contention, as blobs operate at full capacity. This challenge is exacerbated by a substantial backlog in the mempool, where 160 blobs await processing. With Ethereum's current capacity to include only up to six blobs per block, the backlog is approximately 40 times higher than what the network can accommodate in a single block.