Ethereum Fusaka Upgrade Explained: A Catalyst for the Next Growth Cycle

Ethereum spot ETFs have returned to net inflows after last week's weakness, signaling gradually improving market sentiment. Meanwhile, Ethereum's next major upgrade is already on the horizon.

Historically, nearly every technical upgrade has served as a price catalyst, with post-upgrade performance improvements directly reflected in ETH's valuation expectations. The upcoming Fusaka upgrade, scheduled for December 3, promises to be more comprehensive and impactful than previous iterations.

More Than Just Efficiency Optimization

Fusaka represents a substantial upgrade to the entire Ethereum mainnet, addressing fundamental aspects of the network: gas costs, L1 throughput, L2 capacity, and node requirements. Virtually every core metric that determines network vitality will see significant improvement.

While previous upgrades made Ethereum "cheaper" or "faster," Fusaka's significance lies in making Ethereum more scalable and sustainable. As protocol functionality grows increasingly complex and demands on underlying blockchain capacity rise, particularly with the emergence of AI agents and high-frequency interactive DApps, this upgrade will directly influence Ethereum's position in the next wave of Web3 applications.

Core Technical Upgrades: Scaling Without Compromise

The technical improvements in Fusaka share one central purpose: achieving further scalability while maintaining security and decentralization.

PeerDAS: From Complete Storage to Sampling Verification

Blobs, Ethereum's new data structures for storing large amounts of on-chain data, function like shipping containers that efficiently bundle Layer 2 transactions for on-chain submission without occupying permanent storage space.

Before Fusaka, each node had to store complete blob data, similar to a shipping company storing every package in full, resulting in storage overload, bandwidth constraints, and skyrocketing node costs.

PeerDAS introduces a more elegant solution: distributed sampling instead of complete storage:

1. Storage: Each blob is divided into 8 parts, with nodes randomly storing just 1/8 while other nodes store the remaining portions.

2. Verification: Random sampling verification reduces error probability to between 10²⁰ and 10²⁴ to one. Nodes can quickly retrieve missing fragments using erasure coding to reconstruct complete data.

...Once a node successfully reconstructs the original data, it then redistributes the recovered columns back into the network, actively healing any data gaps and enhancing overall system resilience. Nodes connected to validators with a combined balance ≥4096 ETH must be a supernode and therefore must subscribe to all data column subnets and custody all columns. These supernodes will continuously heal data gaps. The probabilistically self-healing nature of the protocol allows for strong availability guarantees while not limiting home operators holding only portions of the data.

This seemingly simple change represents a major advancement in data availability, resulting in:

• 8x reduction in node burden

• Dramatically reduced network bandwidth pressure

• Transformation from centralized to distributed storage, enhancing security

   

Blob Pricing

The Dencun upgrade introduced blobs to enable Rollups to upload data at lower costs, with fees dynamically adjusted based on demand. However, limitations emerged:

• When demand plummeted, fees dropped to near-zero, failing to reflect actual resource usage

• During demand spikes, blob fees could surge dramatically, causing Rollup costs to skyrocket and block delays

These extreme fluctuations occurred because the protocol couldn't perceive the complete price structure, adjusting prices solely based on short-term "consumption."

EIP-7918 in the Fusaka upgrade addresses these fee volatility issues by establishing a reasonable price range for blobs rather than allowing unlimited fluctuations. It adds a minimum reserve price to the pricing system:

• When prices fall below execution cost thresholds, the algorithm automatically prevents fees from approaching zero

• During high loads, it limits price adjustment speed to prevent unlimited fee increases

Another proposal, EIP-7892, makes Ethereum more Layer 2-friendly by allowing dynamic fine-tuning of blob capacity, quantity, and size, like adjusting a dial, without requiring a complete hard fork as before. When L2s need higher throughput or lower latency, the mainnet can respond immediately, significantly enhancing system flexibility and scalability.

Enhanced Security and Usability

While scaling allows Ethereum to process more transactions, it also increases potential attack surfaces. Denial of Service (DoS) attacks can cause network congestion, transaction delays, or even node failures, severely degrading user experience and security across the entire chain.

Ethereum already has robust anti-DoS design, but Fusaka adds another layer of protection. Using a highway analogy, Fusaka's four EIPs simultaneously regulate vehicle speed (EIP-7823), vehicle weight (EIP-7825), tolls (EIP-7883), and vehicle length (EIP-7934). These multi-dimensional controls limit computational load, individual transaction volume, operation costs, and block size, ensuring all "vehicles" can move smoothly despite increased traffic.

For users, pre-confirmation works like reserving a spot at a highway entrance, securing an exit time before entering, with block confirmation happening almost instantly.

For developers, Fusaka optimizes the execution environment: improving contract computation efficiency, reducing complex operation costs, and supporting hardware keys, fingerprint authentication, and mobile device login, simplifying account management and user interaction.

Ecosystem Experience

The Fusaka upgrade delivers comprehensive improvements across the Ethereum ecosystem, with each sector benefiting from specific technical enhancements as outlined below:

And the most highlighted ones are:

More Secure and Stable Staking

Previously, becoming an Ethereum validator resembled a professional endeavor. The traditional model, as shown above, requires stakers to operate and maintain three separate clients (Execution Layer, Consensus Layer, and Validator Client), manage cryptographic keys, and lock up 32 ETH while ensuring constant uptime. High hardware requirements, complex maintenance procedures, and data synchronization times stretching to days deterred average users.

With PeerDAS implementation, nodes only need to download and store approximately 1/8 of data fragments when verifying blob data availability, significantly reducing bandwidth and storage overhead. On the Fusaka testnet, becoming a validator node requires bandwidth of approximately 25 Mb/s.

This makes home-based nodes a reality, allowing more household devices to join network validation, help to secure Ethereum, and directly share staking rewards.

This represents genuine decentralization strengthening. Lower operational barriers mean more independent validators, resulting in a more stable, resilient, and decentralized Ethereum.

From an investor perspective, this optimizes the staking risk structure: when validation nodes aren't concentrated among a few large operators, the chain maintains stability during high loads, with decreased volatility and smoother yield curves.

High-Frequency Interaction: The Era of "Real-Time Ethereum"

DeFi, payments, and AI Agents share a common bottleneck: they all require networks with real-time responsiveness.

Previously, Ethereum was secure but not smooth enough. The 12-second block rhythm was sufficient for single large transfers but too slow for continuous AI Agent instruction calls or millisecond-level settlement in on-chain payments.

Fusaka changes this paradigm through PeerDAS, Gas limit expansion, and reduced L2 costs, making Ethereum more suitable for high-frequency interactive applications.

We may soon witness a more immediate, more explosive Ethereum ecosystem.

DeFi Optimization

Fusaka doesn't just increase throughput, it directly enhances the DeFi operational experience. Lending, synthetic assets, and high-frequency trading protocols will all "run faster at lower costs."

Consider these examples from prominent protocols:

• Aave: Loan liquidation windows shorten and liquidation fees decrease. This results from lower L2 upload costs, allowing liquidation transactions to be packaged faster, reducing slippage and delay risks.

• Synthetix: Immediate settlement times for synthetic assets decrease, as do contract interaction fees. Increased blob capacity means large contract calls are no longer restricted, making capital movement more efficient.

• High-Frequency DEXs: Liquidity pool depth increases, with large exchanges no longer producing significant slippage. This is powered by expanded block gas limits and lower L2 upload fees, substantially improving liquidity utilization.

   

The potential of the Fusaka upgrade is enormous. It may become Ethereum's third milestone-level upgrade with the greatest ecosystem driving force since Merge and Dencun.

From an 8x increase in on-chain data capacity, dramatically reduced transaction fees, and multi-fold throughput improvements, to lower validator barriers, all these changes combined will unleash vitality in the Ethereum ecosystem after this Fusaka upgrade.