High Transaction Fees

Layer-1 blockchains often suffer from high transaction fees, especially during times of congestion. As users compete for limited block space, they need to offer higher transaction fees to have their transactions included in a timely manner. This can make using blockchain-based applications costly for users and limit the adoption of decentralized systems.

Here are some factors that can contribute to high transaction fees in Layer-1 blockchains:

1. Limited Block Space: Layer-1 blockchains typically have a limited block size, which determines the number of transactions that can be included in a single block. When there is high demand for transaction inclusion, and the block size is insufficient, users compete to have their transactions included by offering higher fees. This competition drives up transaction fees.

2. Network Congestion: When the number of transactions waiting to be processed exceeds the network's capacity, congestion occurs. Miners or validators prioritize transactions with higher fees, leading to increased competition and higher transaction fees for users who want their transactions to be processed quickly.

3. Scalability Challenges: Layer-1 blockchains face scalability limitations, as mentioned earlier. If the blockchain network cannot handle a large number of transactions per second, users may need to pay higher fees to get their transactions processed faster.