Fusaka Upgrade Enhances Layer 2 Scalability and Performance
Ethereum has successfully activated its Fusaka upgrade, a significant evolution designed to address the network's long-standing scalability challenges. This hard fork, which occurred on December 3, 2025, at slot 13,164,544, introduces PeerDAS (Peer Data Availability Sampling) to dramatically improve data handling capabilities for Layer 2 solutions. The Fusaka upgrade is the second major network evolution of 2025, following the Pectra rollout in May, and signifies Ethereum's commitment to a cadence of biannual upgrades.
Layer 2 Transaction Throughput Surpasses Visa
The core innovation of the Fusaka upgrade, PeerDAS via EIP-7594, significantly expands blob capacity by eight times. This enhancement is projected to reduce validator data loads by 85%, thereby lowering operational costs and making node participation more accessible. As a direct result, Layer 2 networks such as Arbitrum, Optimism, and Base are expected to experience a 40-60% reduction in transaction fees. This fee reduction is anticipated to unlock a wider adoption of decentralized applications, including DeFi, gaming, and other dApps, for a broader user base. Currently, Ethereum's Layer 2 ecosystem is processing over 100,000 transactions per second (TPS), a figure that substantially exceeds Visa's average throughput of 65,000 TPS, all while maintaining the network's robust decentralization and security.
ETH Price Surges Amidst Institutional Accumulation
The market has responded positively to the Fusaka upgrade. Ethereum's price saw a notable surge, climbing above $3,000 in the hours preceding the upgrade, with a 13% increase observed since December. This rally has been significantly driven by institutional investors, with reports indicating substantial accumulation, such as BitMine's acquisition of over $100,000 in ETH. Analysts suggest that EIP-7918, which includes blob fee reserves, plays a crucial role in capturing value and stabilizing revenue streams, aligning the incentives of Layer 2 solutions with the security of the Ethereum mainnet. Short-term price predictions are targeting the $3,500-$4,000 range. Furthermore, the Fusaka upgrade lays the groundwork for the 2026 GlAmsterdam upgrade, which aims to further refine gas markets and introduce native passkey support. For institutional investors, these improvements offer the prospect of cheaper and faster transaction settlements without compromising Ethereum's established security and resilience.
EIP-7918: Long-Term Value Capture for Ethereum
The enhanced integration of rollups fostered by the Fusaka upgrade is expected to create a positive feedback loop, driving further adoption and liquidity across the Ethereum ecosystem. This advancement promises to enable sub-cent transaction fees for DeFi protocols and facilitate high-volume activities on NFT marketplaces and in real-time auctions. The upgrade also paves the way for more seamless and high-performance gaming experiences on the blockchain. The successful and smooth activation of the Fusaka upgrade has been attributed to the diligent work of Vitalik Buterin and the core development team, with no reported issues following its finalization. As Ethereum continues to strengthen its position against competing blockchain networks, the Fusaka upgrade underscores the ongoing engineering efforts focused on scalability.