Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
The Ethereum network is poised for its next significant upgrade, dubbed Fusaka, which is expected to activate on the mainnet in early December. This upgrade aims to substantially reduce transaction fees on Layer 2 (L2) networks by up to 60% and enhance the overall user experience without altering the core functionality of the primary chain. Fusaka reinforces Ethereum’s strategic pivot towards a modular architecture, positioning Layer 1 (L1) as the secure settlement and data availability layer, while L2s handle the majority of user-facing activity.
Inside the Fusaka Upgrade
Fusaka, a portmanteau of “Fulu” (consensus) and “Osaka” (execution), introduces several key technical modifications focused on data availability, sampling, and blob management. These changes are designed to make posting data to Ethereum’s mainnet cheaper and more efficient for rollups.
A central component is EIP-7594, known as PeerDAS, which allows network nodes to sample only fragments of rollup data, called “blobs,” instead of downloading an entire block’s worth. This innovation significantly increases blob capacity and lowers bandwidth costs for validators, a crucial step for scaling L2 throughput. Complementing this, EIP-7892 introduces “Blob Parameter-Only” forks (BPOs), a mechanism enabling developers to incrementally increase the number of blobs per block without requiring extensive protocol rewrites, thereby allowing dynamic tuning of Ethereum’s data capacity.
Further technical enhancements include EIP-7918, which establishes a base-fee floor for blobs, preventing data space auction prices from plummeting during periods of low demand. For user experience, EIP-7951 adds support for the secp256r1 cryptographic curve, enabling WebAuthn and facilitating passkey logins across Ethereum wallets. EIP-7917 improves transaction assurance by introducing deterministic proposer look-ahead, which helps pre-confirmation systems predict the next block producer. Additionally, EIP-7825 caps transaction gas to mitigate denial-of-service risks, and EIP-7935 adjusts default block gas targets to maintain validator stability. These upgrades are already live on testnets such as Holesky and Sepolia.
Impact on Fees and User Experience
The primary financial benefit of Fusaka will be felt by users on Layer 2 networks, not Layer 1. By allowing rollups to post more data at a reduced cost, the upgrade is expected to improve the economic viability of networks like Arbitrum, Optimism, Base, and zkSync. Internal projections suggest that rollup fees could decrease by 15% to 40% under typical conditions, potentially reaching up to a 60% reduction if blob supply consistently outpaces demand.
While Layer 1 gas prices are anticipated to remain relatively stable, future adjustments to block gas targets could lead to a modest 10-20% reduction. The enhancements to user experience, particularly through passkey support and predictable proposer schedules, are significant. WebAuthn integration means wallets can offer biometric or device-based logins, eliminating the need for seed phrases or passwords. Furthermore, pre-confirmations will enable near-instant transaction confirmations, especially on rollups, making the Ethereum ecosystem feel smoother and more responsive. The article asserts that Fusaka will not draw users back to Layer 1 but will instead make Layer 2 even more compelling.
Ethereum’s Layered Future
Fusaka solidifies Ethereum’s commitment to a modular design, where Layer 1 serves as the high-security settlement and data availability foundation, while Layer 2 handles the bulk of user interactions. This architectural split is reinforced by the upgrade, as increased blob capacity empowers L2s to manage higher throughput for applications like gaming, social platforms, and micro-transactions, which would be economically unfeasible on the mainnet. The improved login and confirmation workflows aim to make these L2 environments feel native and instantaneous, effectively closing the user experience gap that once favored L1.
Layer 1 is expected to remain the preferred choice for specific, high-value operations such as institutional-scale transfers, major settlements, or scenarios where precise block-ordering is critical, including miner extractable value (MEV) management or DeFi clearing. However, these use cases represent a small fraction of the overall on-chain activity, with L2s becoming the natural home for most users.
Broader Implications and Outlook
Viewed through a broader lens, Fusaka represents a maturation of the Ethereum network, providing a scalable framework for adjusting data capacity without disruptive forks and delivering a Web3 user experience that rivals Web2. The underlying philosophy is clear: Ethereum is building an expressway system where rollups manage local traffic, and L1 acts as the secure courthouse for final notarization.
The monetary layer of this story suggests that cheaper data posting could attract a wave of new low-value applications, such as social and gaming, back to rollups. Each of these applications will continue to consume ETH through blob fees, and with EIP-7918’s fee floor, these fees contribute to ETH burn. The network’s burn rate could even increase if activity expands faster than the rate of fee decline, despite lower costs for users. On the validator side, while PeerDAS reduces bandwidth load, it may introduce a greater reliance on “supernodes” that store full blob data, presenting a decentralization trade-off that the community will continue to evaluate. This balance between throughput, usability, and trust reflects the evolving direction of crypto infrastructure, with L1s becoming hardened secure bases and L2s absorbing experimentation and scaling.
Key Takeaways
The Fusaka upgrade is not an attempt to shift focus back to the Ethereum mainnet; rather, it is a deliberate move to fortify the foundations for a rollup-centric future. By expanding data capacity, stabilizing fees, and modernizing the wallet experience, Fusaka serves the layers above Layer 1. As a result, Ethereum’s L1 becomes more secure and efficient, while users benefit from L2s that are now cheaper and faster than ever before. Going into 2026, key indicators to monitor will include blob utilization versus capacity, the extent of L2 fee compression, and the adoption of passkeys in wallets. These factors will ultimately determine how frictionless the Ethereum ecosystem feels, not by drawing users back to the main chain, but by making the off-ramps virtually invisible.
