Who Pays Ethereum When Rollups Move Transactions Off-Chain?

Ethereum rollups such as Arbitrum, Base and Optimism execute most user transactions away from Ethereum’s Layer 1. That lowers costs, but it does not mean Ethereum stops earning fees. Rollups still depend on Ethereum for data availability, settlement and security, and they pay ETH when they use those services.

The important distinction is that users usually pay the Layer 2 first, while the rollup operator later pays Ethereum to settle batches of transactions.

Rollup Users Pay the First Fee

When someone sends a transaction on a rollup, the fee generally contains multiple components.

According to Ethereum.org, optimistic rollup fees include the cost of executing the transaction on Layer 2, plus the cost of publishing transaction data to Ethereum. Rollup operators collect these fees from users and use part of that revenue to cover their Ethereum expenses. 

Instead of paying Ethereum separately for every user transaction, the rollup combines hundreds or thousands of transactions into batches. This batching is what makes Layer 2 transactions substantially cheaper.

Rollup Operators Pay Ethereum in ETH

Rollups periodically submit information about those batches to Ethereum. Today, much of this information can be posted using blobs, temporary data storage introduced by EIP-4844. Blob space has its own dynamic fee market, so its price changes according to demand. 

Rollup operators therefore pay Ethereum in ETH when they submit blob-carrying transactions and other required Layer 1 transactions.

Ethereum.org notes that historically more than 90% of rollup transaction costs could come from storing data on Ethereum, which explains why cheaper blobs were such an important scaling improvement.

ZK Rollups Also Pay for Proof Verification

Zero-knowledge rollups add another expense. They generate cryptographic proofs showing that a batch of transactions was processed correctly and then submit those proofs for verification on Ethereum. Ethereum.org estimates that verifying a ZK proof on Mainnet can consume roughly 500,000 gas, although actual requirements depend on the rollup and proof system. 

So even though computation happens mostly outside Ethereum, Ethereum still earns fees for being the final verification and settlement layer.

Why Doesn't Ethereum Process Everything Directly?

The economic model is based on wholesale rather than retail settlement. Imagine 5,000 Layer 2 transactions. Instead of all 5,000 competing individually for ETH block space, a rollup processes them elsewhere, compresses the necessary information and purchases a smaller amount of Ethereum data and settlement capacity.

Ethereum says rollup batches can represent thousands of off-chain transactions in a single Layer 1 transaction.  Users get cheaper transactions, while Ethereum continues earning fees from the rollups themselves.

Could Cheaper Rollups Reduce Ethereum Revenue?

There is a trade-off. Blobs deliberately make Ethereum data availability cheaper, so Ethereum may earn less per unit of rollup activity.

The strategy is to compensate through enormous scale. Ethereum’s roadmap targets further improvements that could ultimately support more than 100,000 transactions per second across Layer 2 networks. 

Also Read: Ethereum’s Next Phase: How the Blockchain is Preparing for the Next 10 Years

Final Thoughts

Rollups do not eliminate Ethereum from the payment chain; they change who pays it and what they pay for.

Users pay rollup fees, rollup operators aggregate those transactions, and operators ultimately spend ETH for Ethereum’s data availability, proofs and settlement. Ethereum is therefore evolving from processing every transaction itself into a base layer selling secure block space and settlement to entire Layer 2 networks.

FAQs:

1. Who actually pays Ethereum when using a rollup?

Users generally pay fees to the Layer 2 network first. The rollup operator then uses part of those fees to pay Ethereum in ETH for data publication, settlement and other Layer 1 costs.

2. Why do rollups still need Ethereum if transactions happen off-chain?

Rollups execute transactions outside Layer 1 but rely on Ethereum for final settlement, security and data availability. This lets users get cheaper execution without giving up Ethereum as the underlying trust layer.

3. What are blobs and why do rollups use them?

Blobs are a lower-cost form of temporary data storage introduced through EIP-4844. Rollups use them to publish transaction data to Ethereum more cheaply than relying entirely on traditional calldata.

4. Do ZK rollups pay Ethereum differently?

ZK rollups also pay Ethereum to verify cryptographic proofs showing that off-chain transaction batches were processed correctly. Proof verification consumes Layer 1 gas in addition to the cost of publishing relevant data.

5. Do cheaper Layer 2 fees reduce Ethereum’s revenue?

They can reduce the amount Ethereum earns per individual transaction or unit of rollup activity. The long-term strategy is for much higher Layer 2 usage and batching volume to compensate through scale.