Ethereum's Fusaka Upgrade and the Strengthening of ETH's Value Accrual Model

Ethereum's Fusaka Upgrade, activated on December 3, 2025, represents a pivotal evolution in the blockchain's infrastructure and economic design. By introducing innovations like PeerDAS (Peer Data Availability Sampling), BPO (Blob Parameter Only) forks, and EIP-7918, the upgrade not only enhances scalability but also redefines how Ethereum captures and distributes value. These changes are not merely technical optimizations-they are foundational to creating a self-reinforcing economic flywheel that strengthens ETH's value accrual model over the long term.

PeerDAS: Reducing Costs, Expanding Throughput

At the heart of Fusaka is PeerDAS, a protocol-level innovation that allows nodes to verify data availability by sampling small portions of blob data rather than downloading entire datasets. This reduces bandwidth and storage requirements by up to 85%, enabling Ethereum to process up to 8× more blob data per block according to Coingecko. For Layer 2 (L2) rollups like Arbitrum and Optimism, this means drastically lower data posting costs-estimates suggest a 40–60% reduction in L2 transaction fees.

The economic implications are profound. Lower L2 fees incentivize greater adoption of rollups for everyday transactions, shifting more activity from Ethereum's mainnet to cost-efficient L2s. This, in turn, increases the volume of data posted to Ethereum's blob layer, creating a virtuous cycle: higher blob throughput drives more consistent revenue for Ethereum through blob fees, while reduced costs make the network more attractive to developers and users.

BPO Forks: Scalability Without Friction

Complementing PeerDAS are BPO forks, which allow incremental increases in blob capacity without requiring full hard forks. Scheduled for December 9 and January 7, 2026, these updates dynamically adjust blob targets and maximums, ensuring Ethereum can scale in response to demand. This flexibility eliminates the need for disruptive upgrades, maintaining network stability while accommodating growth.

The result is a more predictable and scalable infrastructure. For investors, this means Ethereum can handle surges in activity-such as those driven by tokenized real-world assets or DeFi expansion-without compromising performance or security. As BPO forks enable higher data throughput, they also reinforce Ethereum's role as the primary settlement and data availability layer for a modular ecosystem, further entrenching its dominance.

EIP-7918: Anchoring Value Accrual

A critical economic safeguard introduced by Fusaka is EIP-7918, which sets a reserve price for blob fees. This mechanism ensures that blob fees cannot fall below a threshold tied to Ethereum's execution layer costs, preventing underpricing during low-demand periods. By aligning blob fees with execution gas prices, the upgrade strengthens the link between L2 activity and ETH value accrual.

This is particularly significant for Ethereum's revenue model. Prior to Fusaka, blob fees could dip to near-zero levels, weakening the network's ability to capture value from L2s. With EIP-7918 in place, Ethereum now generates more consistent income from data availability, even during periods of low usage. Analysts estimate that had this mechanism been active since the Dencun upgrade, Ethereum could have accrued an additional $78 million in revenue-potentially adding over $50 billion to its valuation.

Deflationary Pressures and Fee Dynamics

Fusaka's impact extends beyond revenue generation. By reducing L2 data costs and increasing transaction throughput, the upgrade is expected to amplify fee burns under EIP-1559. Higher network activity leads to more frequent and larger burns, creating deflationary pressure on ETH supply. This dynamic is further reinforced by the increased efficiency of validators, who now require less hardware to process transactions, lowering barriers to staking participation.

The deflationary flywheel is clear: as Ethereum becomes more scalable and cost-effective, its usage grows, driving up demand for ETH while reducing its supply. This dual effect-increased utility and reduced scarcity-positions ETH as a more compelling store of value and medium of exchange.

Long-Term Flywheel: Adoption, Revenue, and Network Effects

The Fusaka Upgrade's components are interconnected, forming a self-reinforcing cycle. Lower L2 fees attract more users and developers, increasing data availability demand. PeerDAS and BPO forks ensure this demand is met without compromising performance, while EIP-7918 guarantees Ethereum captures a fair share of the economic value generated. The result is a network that scales efficiently, generates sustainable revenue, and rewards ETH holders through deflationary mechanics.

Looking ahead, Ethereum's strategic focus on L1-L2 synergy is fostering a balanced ecosystem. Rollups can innovate and optimize user experiences, while Ethereum's base layer remains the secure and efficient backbone. This modular approach aligns with broader industry trends, positioning Ethereum to dominate not just in transaction throughput (projected to exceed 100,000 TPS via rollups) but also in real-world asset tokenization and institutional adoption.

Conclusion: A New Era for Ethereum's Value Proposition

The Fusaka Upgrade marks a turning point in Ethereum's evolution. By addressing scalability, cost efficiency, and value accrual simultaneously, it lays the groundwork for a network that is both technically robust and economically sustainable. For investors, this means Ethereum is no longer just a platform for innovation-it is a cash-flowing asset with a defensible moat.

As the flywheel gains momentum, the question is no longer if Ethereum will succeed, but how quickly it will outpace alternatives. With Fusaka's infrastructure in place, the answer is clear: Ethereum's value accrual model is stronger than ever, and the long-term outlook for ETH has never been more compelling.