Fusaka Upgrade Transforms Ethereum Scalability and Institutional Appeal

• Ethereum's Fusaka upgrade activated in December 2025 introduced PeerDAS for major scalability gains.
• Institutional ETH holdings surpassed 10 million tokens despite price volatility throughout 2025.
• Layer-2 transaction fees dropped 75-95% following Fusaka's efficiency improvements.

Ethereum's Fusaka upgrade activated on December 3, 2025, marking a significant technical milestone. The protocol changes enhance Ethereum's capacity as institutional adoption grows rapidly. Network fundamentals show record activity though price performance remains challenging according to reports.

How Did Fusaka Upgrade Reshape Ethereum's Technical Foundation?

Fusaka introduced Peer Data Availability Sampling (PeerDAS) which transforms how validators manage information. This innovation reduces bandwidth and storage requirements by up to 95% while enabling 8x greater Layer-2 throughput. That dramatically lowers costs for rollups like Arbitrum and Optimism according to analysis.

Gas limit expansions also boosted Ethereum's base layer transaction capacity alongside these efficiency gains according to reports. EIP-7918 established reserve pricing for blob gas fees, creating predictable fee economics for validators according to technical analysis. These combined changes help Ethereum support more complex applications with greater stability across diverse markets according to industry experts.

What Impact Is Fusaka Having on Institutional Adoption?

Major financial institutions accelerated Ethereum engagement after the upgrade activated. Corporate treasuries and ETFs held over 10 million ETH collectively by Q3 2025. BlackRock and Franklin Templeton now tokenize financial products directly on Ethereum.

The protocol's enhanced scalability and yield potential drive this institutional embrace according to market analysis. Staking rewards of 3-4% provide attractive yields in regulated frameworks according to institutional reports. Network activity confirms this trend with daily transactions hitting 1.87 million and active addresses reaching 728,904 according to traders. These metrics suggest structural shifts beyond temporary spikes according to industry analysis.

Can Ethereum Overcome Its 2025 Price Challenges After Fusaka?

Ethereum faced notable price pressure despite its technical progress according to market data. ETH fell nearly 40% from its August 2025 peak to around $2,900 by year-end according to price analysis. The Dencun upgrade shifted Ethereum into inflation after ending its deflationary period.

Competition from chains like Solana in payments and DePIN added further headwinds. Still, analysts project 2026 price targets between $7,000-$12,000 based on institutional inflows and Fusaka's long-term impact according to investment research. The network's dominance in real-world assets and stablecoins provides a solid foundation for recovery.