Ethereum's Fusaka Upgrade and the Oncoming ETH Supply Crunch: Deflationary Dynamics and Long-Term Value Accrual

Fusaka introduces PeerDAS, a protocol-level enhancement that reduces node bandwidth requirements by 85% by enabling data availability sampling rather than full dataset downloads. This innovation allows Ethereum to scale its data throughput by up to 8× without overburdening individual nodes, a critical step in accommodating the growing demand from Layer 2 (L2) rollups. Concurrently, the block gas limit is increasing from 36 million to 60 million, directly improving L2 transaction efficiency. Rollups like Arbitrum, Optimism, and Base are projected to see 40–60% reductions in transaction costs, incentivizing broader adoption and higher network activity.

The gas limit increase to 60 million further amplifies this effect by enabling higher transaction throughput and lower per-transaction costs, driving network activity and fee burns. Combined with PeerDAS and BPO scaling, these changes are expected to reduce Layer 2 fees by 60–95% according to market analysts, making microtransactions and decentralized applications (dApps) more accessible. This surge in usage will likely accelerate ETH's deflationary trajectory, particularly as institutional adoption-reflected in a 177% growth in Ethereum ETF assets under management in Q3 2025-shifts liquidity from speculative retail traders to long-term stakers and institutional holders.