Study Reveals Mispricing Risks in Ethereum Layer-2 Rollups, Threatening Stability and Costs

Executive Summary

A joint study by zkSecurity, Prooflab, and Imperial College London identifies significant mispricing of small transactions across Ethereum Layer-2 rollups, raising concerns about network stability and user costs.

The Event in Detail

A recent study titled “Unaligned Incentives: Pricing Attacks Against Blockchain Rollups,” published by researchers from zkSecurity, Prooflab, and Imperial College London, details critical flaws in how Ethereum Layer-2 rollups calculate transaction fees. The research indicates that current fee mechanisms are overly simplistic, failing to adequately account for the distinct costs associated with computation, data availability, and proof generation. This collapse of cost factors results in small transfers being inaccurately priced, often leading to either inflated expenses for users or underpriced transactions that can be exploited.

The study benchmarked five prominent rollups: Polygon zkEVM, zkSync Era, Scroll, Optimism, and Arbitrum. These analyses revealed wide disparities in their fee-setting methodologies, highlighting divergent and potentially exploitable rules across the Layer-2 ecosystem.

Financial Mechanics

Rollups are designed to scale Ethereum by batching transactions and settling them on the Layer-1 blockchain. To operate, these networks must cover three distinct resource costs: computation for executing transactions within a batch, data availability for posting transaction data back to the Layer-1 chain for verification, and the gas cost associated with batch settlement and proof verification.

Traditionally, public blockchains utilize a single, fungible unit of account, such as Ethereum's gas, to price these otherwise non-fungible resources. This approach involves hardcoding the relative prices of bandwidth, computation, and storage. However, this fixed pricing inhibits granular price discovery and can create opportunities for exploitation. For instance, some rollup networks employ refund systems, which can be gamed by malicious actors submitting numerous transactions and then reclaiming portions of the fees, potentially facilitating denial-of-service attacks.

Market Implications

The mispricing identified in the study carries substantial implications for the broader Web3 ecosystem. Users face the risk of inflated transaction costs, eroding the economic benefits of Layer-2 scaling solutions. More critically, underpriced transactions create vulnerabilities that could be exploited for denial-of-service attacks, compromising network stability and security.

To mitigate these risks, the study advocates for the implementation of multidimensional fee mechanisms. These mechanisms would price execution, data posting, and proving separately, aligning fees more closely with the actual consumption of resources. Such an approach is projected to enhance system resistance to spam attacks and provide users with more predictable transaction costs.

Precedents for multidimensional pricing exist, with Solana having previously implemented local fee markets. Similarly, Ethereum's upcoming Dencun update, through EIP-4844, will introduce blobs with an independent fee mechanism, effectively creating a two-dimensional fee market. Other blockchains, including Avalanche and Penumbra, have also adopted multidimensional fee structures.

Expert Commentary

Researchers involved in the study emphasize that adopting multidimensional pricing for execution, data, and proof is crucial for preventing systemic risks within Ethereum Layer-2 rollups. This view is supported by broader academic research, which suggests that multidimensional blockchain fee markets are "essentially optimal, even against worst-case adversaries," according to findings presented at DROPS.

Broader Context

The challenges highlighted by the study are part of a wider discourse on optimizing blockchain fee markets. The reliance on a single-dimensional fee model, which conflates various resource costs, limits network throughput and exacerbates susceptibility to adversarial behaviors like spam. A study from Flashbots indicates that on EVM L2s, up to 80% of gas can be consumed by spam transactions that pay a disproportionately low percentage of total gas fees.

Implementing multidimensional fee markets, however, presents its own complexities, particularly for high-throughput blockchains. The "block-packing problem" — choosing the highest utility transactions given resource constraints — is an NP-hard challenge, making perfect solutions computationally intensive. Current research suggests that heuristic solutions and dimensionality reduction methods may be necessary for practical, low-latency, and high-throughput implementations. Ultimately, addressing these fee mechanism flaws is vital for the continued secure and efficient scaling of Ethereum and the broader adoption of Layer-2 technologies.