Ethereum Pectra Upgrade Boosts Rollup Profitability and Reduces MEV

The Ethereum network has undergone significant changes after the Pectra upgrade, which altered the fee market and led to increased capacity. EIP-7691 raised the blob target from 6 to 9 per block, while EIP-7623 made calldata more expensive, forcing developers towards blobs. As a result, rollups like Base and Optimism saw their profitability surge due to reduced blob pricing.

The upgrade also enabled features such as gasless transacting and custom asset access through EIP-7702, which allowed regular wallets to behave like smart contracts during single transactions. Developers are using these tools to reduce gas fees by employing modular contracts and account abstraction.

Most applications now utilize off-chain computation to decrease expensive L1 usage. EIP-2935 allows rollups to access the last 8192 previous blocks directly in the network state, while EIP-7685 enables smart contracts to interact with the consensus layer, enabling developers to write logic that considers block validation.

The burn rate has fluctuated since the 12,000 ETH base fee spike in September. The daily ETH burn from blobs fell by 71% after the Pectra upgrade, despite a 21% increase in blob usage, due to cheaper blob fees. The proposal for proposer-builder separation aims to force builders to compete by bidding in ETH, which is then destroyed, reducing MEV and smoothing staking yields.