Onchain Profit
The net profit of L2s, accounting for revenues as L2 gas fees collected and expenses as posting transaction data & verification states onto Ethereum.
What does Onchain Profit tell you?
Onchain Profit is a key metric for assessing the financial viability of scaling solutions. It quantifies profitability by comparing the revenue generated from L2 gas fees collected to the costs associated with data & proof posting onto the Ethereum blockchain. L2 profitability can increases for two reasons: firstly, when there is high demand for L2 blockspace, enabling an auction of the available blockspace for a premium. Secondly, if the operator (who controls the sequencer) increases the base fee scalar. This metric can be used to gauge the health and success of Layer 2 solutions.