{"id":24090,"date":"2025-05-19T10:43:40","date_gmt":"2025-05-19T07:43:40","guid":{"rendered":"https:\/\/forklog.com\/en\/fusaka-upgrade-what-it-means-for-ethereums-future\/"},"modified":"2025-05-19T10:43:40","modified_gmt":"2025-05-19T07:43:40","slug":"fusaka-upgrade-what-it-means-for-ethereums-future","status":"publish","type":"post","link":"https:\/\/forklog.com\/en\/fusaka-upgrade-what-it-means-for-ethereums-future\/","title":{"rendered":"Fusaka upgrade: what it means for Ethereum\u2019s future"},"content":{"rendered":"

The second-largest cryptocurrency has finally stirred after a prolonged slump, particularly visible in the ETH\/BTC pair<\/a>.<\/p>\n

Despite a recent outperformance rally<\/a>, ether still trades nearly 50% below its all-time high of ~$4900<\/a> set in November 2021. Rising competition from DeFi ecosystems on Solana, BNB Chain and, paradoxically, Ethereum\u2019s own layer-2 (L2) solutions is taking its toll. The latter are meant to help scale the base chain but have, in practice, siphoned off a large share of on-chain activity.<\/p>\n

Developers, however, are steadily laying the groundwork for comprehensive upgrades. One of the latest \u2014 Pectra<\/a> \u2014 improved L2 efficiency, added smart-contract functionality to wallets and restarted the deflationary mechanism<\/a>.<\/p>\n

The next phase will be the Fusaka upgrade<\/a>, slated for year-end. ForkLog examined this ambitious, strategically important update and how it could shape Ethereum\u2019s future.<\/p>\n

Lingering problems<\/h2>\n

Ethereum faces criticism for stagnant on-chain activity on the base chain \u2014 the Dencun hard fork<\/a> sharply reduced L2 costs, to which transaction volumes migrated. Markets have therefore come to see ETH as less valuable, Sygnum\u2019s experts reckon.<\/p>\n

On many key metrics the network trails Solana: for most users, speed and low fees seem to outweigh the degree of decentralisation.<\/p>\n

\"1-tx_fees_comparison\"
Average and median fees on Solana vs Ethereum. Data: Dune<\/a>.<\/figcaption><\/figure>\n

Each day the \u201cpeople\u2019s\u201d network handles 30\u201360m transactions. Ethereum\u2019s layer 1 manages just over 1m.<\/p>\n

\n
\"2-solana_non_vote_tx\"
Data: The Block<\/a>.<\/figcaption><\/figure>\n
\"3-eth_daily_tx_chart\"
Data: Etherscan<\/a>.<\/figcaption><\/figure>\n<\/figure>\n

Fee revenue on Solana already exceeds that of the second-largest crypto network.<\/p>\n

\"4-ETH_vs_SOL_onchain_fees\"
Monthly on-chain fee revenue in Solana vs Ethereum. Data: The Block<\/a>.<\/figcaption><\/figure>\n

Ethereum also trails Solana and now BNB Chain by aggregate DEX turnover.<\/p>\n

\"5-DEX_vol_comparison\"
Network ranking by daily DEX volume. Data: DeFi Llama<\/a>.<\/figcaption><\/figure>\n

Although the lion\u2019s share of TVL<\/span> in DeFi is still on ether, competition is intensifying. Ethereum\u2019s share of the ecosystem will likely soon drop below 50%.<\/p>\n

\"6-TVL_share\"
Shares of different ecosystems in decentralised finance. Data: DeFi Llama<\/a> as of 14 May.<\/figcaption><\/figure>\n

On the other hand, there are no convincing signs<\/a> that Solana will surpass Ethereum as the preferred blockchain for institutions.<\/p>\n

Ether dominates tokenisation, which is popular among traditional financial institutions.<\/p>\n

\"7-RWA_league\"
In \u201creal-world assets\u201d, Ethereum is more popular than all other networks combined. Data: rwa.xyz<\/a>.<\/figcaption><\/figure>\n

Yet opinions are being voiced<\/a> that Solana will overtake Ethereum by the number of consumer decentralised applications (dapps).<\/p>\n

To withstand the intensifying competition and retain leadership, Ethereum needs comprehensive upgrades that improve scaling and UX<\/span>.<\/p>\n

What did Pectra change?<\/h2>\n

On 7 May the Pectra upgrade went live<\/a>. The largest update by number of proposals was activated at epoch 364,032.<\/p>\n

The upgrade bundles a series of improvements aimed at convenience and efficiency. It includes 11 key EIP<\/span>.<\/p>\n

One important change adds smart-contract functionality to wallets, simplifying their use and recovery.<\/p>\n

The update also doubled storage for scaling L2 networks and improved the UI<\/span> for validators.\u00a0<\/p>\n

Shortly before activation, some argued that Pectra would not \u201cboost\u201d Ethereum\u2019s price<\/a>. The upgrade, however, helped restore ether\u2019s deflationary model.<\/p>\n

\"8-ultrasound_deflation\"
Projected annual reduction in Ethereum supply via burning is ~6.2%. Data: Ultrasound Money<\/a>.<\/figcaption><\/figure>\n

Binance partner and Web3 growth manager Kas Abbe believes<\/a> that a pick-up in burning \u201cwithin hours of Pectra\u2019s activation\u201d supported the price. He forecasts it will reach $3000 in the second quarter.<\/p>\n

\n\u201cIf ETH burning intensifies, the supply problem will be solved, and that will ultimately attract demand,\u201d Abbe suggested.<\/cite><\/p><\/blockquote>\n

Pectra did reinforce the burn: more data in blocks (EIP-7691<\/a>), more complex transactions (EIP-7702<\/a>) and the ability to batch have meant more ETH is being destroyed than created.<\/p>\n

The update increased BLOB<\/a> capacity per block, doubling throughput for ZK and optimistic rollups. A higher volume of transactions carrying large binary payloads boosts fee revenue that is automatically burned.<\/p>\n

Exchanges, wallet providers and dapp developers are showing keen interest in the new features. This is evident in the surge of smart-account authorisations under EIP-7702 \u2014 more than 19,000 since Pectra\u2019s activation.<\/p>\n

\"10-EIP7702_auth\"
Data: Dune<\/a> as of 19 May.<\/figcaption><\/figure>\n

Post-upgrade, a regular EOA<\/span> address can delegate operations to a smart contract by setting a special flag. When a transaction arrives, the corresponding code runs instead of the standard logic. Delegation can be revoked at any time \u2014 control over funds remains with the owner.<\/p>\n

WhiteBIT, OKX Wallet and MetaMask lead by number of authorisations:\u00a0<\/p>\n

\"11-EIP7702_auth_by_deleg\"
Data: Dune<\/a> as of 16 May.
<\/figcaption><\/figure>\n

Smart accounts allow complex actions within a single transaction \u2014 for example, approving a token and executing a DEX swap simultaneously. They support multisig, spending limits, autopayments and even paying gas in a chain\u2019s native token instead of ETH.<\/p>\n

What will Fusaka bring?<\/h2>\n

The next major update, dubbed Fusaka, is pencilled in for the second half of the year<\/a>. Under an optimistic scenario, the hard fork could arrive as early as September or October.<\/p>\n

The comprehensive upgrade<\/a> focuses on improving Ethereum\u2019s scalability and smart-contract reliability, simplifying development across the ecosystem and increasing transaction efficiency.\u00a0<\/p>\n

The centrepiece of Fusaka is the PeerDAS protocol (EIP-7594<\/a>), which lets nodes request only specific fragments of data instead of the entire block. This reduces node load, improves data distribution and increases network throughput.<\/p>\n

\n\u201cThis method preserves data-availability guarantees without requiring high bandwidth or significant storage costs from node operators,\u201d explained<\/a> DataWallet experts.<\/cite><\/p><\/blockquote>\n

In 2024, developer P\u00e9ter Szil\u00e1gyi called<\/a> PeerDAS a blow to home Ethereum stakers and a threat to the network\u2019s decentralisation. It was initially expected to be included in Pectra.<\/p>\n

Fusaka also envisions more than doubling the layer-1 gas limit, which should materially increase throughput.<\/p>\n

Core developer Tim Beiko removed the Ethereum Object Format (EOF) improvement from Fusaka\u2019s specification. The initiative proposed reworking EVM bytecode structure to improve contract execution efficiency and reduce gas costs. Its implementation is now postponed until at least the next hard fork.<\/p>\n

\n\u201cDevelopers have put the emphasis on PeerDAS, pushing all other Fusaka features to the background. This technology is the key to scaling Ethereum given the growing needs of layer-2 solutions and resource-intensive dapps,\u201d DataWallet noted.<\/cite><\/p><\/blockquote>\n

The next upgrade will also implement more than a dozen previously deferred EIPs.<\/p>\n

\"9-15_eips\"
Ethereum Improvement Proposals slated for implementation in Fusaka. Data: DataWallet<\/a>.<\/figcaption><\/figure>\n

Among other changes:\u00a0<\/p>\n