Bitwise Asset Management says Ethereum's Fusaka upgrade cements the network's role as a settlement layer for on-chain finance by introducing a minimum fee for layer-2 data and expanding capacity without compromising validator efficiency.
The upgrade activated December 3, introducing infrastructure changes that crypto asset manager Bitwise describes as reinforcing Ethereum's institutional positioning. Chief Investment Officer Matt Hougan projects the economic mechanisms could increase network revenue capture by 5-10x through improved blob fee pricing.
Fusaka's most significant economic change implements a minimum blob base fee that prevents data costs from dropping to near-zero during periods of low demand. The mechanism addresses a post-Dencun flaw where blob pricing became ineffective.
What Happened
The upgrade deployed 12 Ethereum Improvement Proposals focused on data availability scaling and execution layer performance. EIP-7918 introduces a reserve price for blob fees tied to execution gas costs, creating a floor that maintains economic sustainability.
Under the previous system, blob fees frequently collapsed to 1 wei when layer-2 activity remained below capacity targets. Between June and October 2025, Ethereum generated approximately $900 in blob fees before the pricing mechanism adjustment.
The new formula sets the minimum blob cost at roughly the execution base fee divided by 16, according to Bitwise analysis. When execution gas dominates transaction costs, the fee adjustment algorithm treats blocks as over target and allows blob prices to rise normally.
This creates more predictable cost structures for layer-2 operators as stablecoins, decentralized finance protocols, and tokenized assets migrate to rollups. Analysis from Fidelity Digital Assets estimates that had EIP-7918 been active since the March 2024 Dencun upgrade, adjusted fees would have exceeded observed fees on 93% of days.
Fusaka also raises the layer-1 gas limit to 60 million per block from 45 million, expanding mainnet capacity by approximately 33%. The increase doubles throughput compared to the 30 million limit set after the September 2022 Merge.
Also read: [SEC Halts High-Leverage ETF Filings, Citing Rising Market Risk](SEC Halts High-Leverage ETF Filings, Citing Rising Market Risk)
PeerDAS technology reduces the data burden validators must verify for blob availability. The sampling approach cuts bandwidth requirements by up to 85%, enabling higher blob targets without pushing node requirements beyond consumer hardware capabilities.
Two Blob Parameter Only forks scheduled for December 9 and January 7, 2026, will increase per-block blob targets from 6 to 10 and then 14. Maximum capacity rises from 9 to 15 and then 21 blobs per block.
Why It Matters
Layer-2 networks now process over 530 million transactions monthly with combined total value locked exceeding $39 billion. These rollups rely on Ethereum for security and data availability, posting transaction batches in blob format to the base layer.
Current blob capacity frequently reaches the 9-per-block ceiling, creating upward pressure on rollup fees and incentivizing exploration of alternative data availability providers. Fusaka addresses this bottleneck while establishing clearer economic relationships between layer-1 and layer-2 activity.
The reserve pricing mechanism ensures Ethereum captures value proportional to the computational resources layer-2 networks consume. This contrasts with the post-Dencun period when blob space was effectively subsidized through near-zero pricing.
Bitwise argues the upgrade positions Ethereum as the primary settlement layer for institutional on-chain finance. Hougan stated the market may begin recognizing Fusaka's economic implications as an underappreciated catalyst for network growth.
The firm cautioned that major upgrades historically produce modest immediate price impacts and sometimes trigger sell-the-news patterns. However, Bitwise frames Fusaka as reinforcing Ethereum's long-term infrastructure advantages in decentralized finance and tokenized assets.
Some analysts project layer-2 data fees could decline 40-60% over time as expanded capacity reduces congestion. Lower costs enable applications requiring high transaction volumes in gaming, social platforms, and financial services without proportional increases in base layer costs.
The upgrade's validator efficiency improvements make node operation more accessible. Reduced bandwidth and storage requirements lower barriers for home stakers while maintaining network decentralization, a core principle in Ethereum's scaling roadmap.
Ethereum activated Fusaka at epoch 411,392 following successful testnet deployments on Holesky, Sepolia, and Hoodi networks. The upgrade marks the network's second major hard fork of 2025 after the Pectra enhancement in May.
Read next: Bitcoin Buy-Side Ratio Hits Highest Level Since 2023 as Liquidity Improves