Ethereum enters final testnet phase ahead of Dec. 3 Fusaka upgrade
News Summary
Ethereum's Fusaka upgrade is entering its final testnet phase, with mainnet rollout expected on Dec. 3. The update introduces a per-transaction gas cap of roughly 16.78 million units, designed to enhance block efficiency and prepare the network for parallel execution. This change, already active on the Holesky and Sepolia testnets, aims to prevent single transactions from monopolizing an entire block's gas, thereby mitigating potential denial-of-service risks and improving scalability. The Fusaka upgrade (EIP-7825) is a significant part of Ethereum's roadmap, following the Dencun upgrade in March 2024 and the Pectra upgrade on May 6, 2025. It raises Ethereum’s default block gas limit to 60 million, sets a per-transaction gas cap of 16.77 million under EIP-7825, and debuts PeerDAS. PeerDAS allows nodes to store only small random portions of Layer 2 “blob” data, reducing hardware demands and enabling cheaper, higher-throughput scaling for Layer 2 networks. The subsequent Glamsterdam upgrade will focus on the execution layer and introduce EIP-7928, the first major step toward parallel transaction processing.
Background
Ethereum is a decentralized, open-source blockchain platform renowned for its smart contract functionality, serving as the foundation for DeFi (decentralized finance), NFTs (non-fungible tokens), and Web3 applications. However, its network has consistently faced scalability challenges, leading to high transaction fees and slower processing speeds. To address these issues, Ethereum is undergoing a series of major upgrades, collectively known as "Ethereum 2.0" or "Serenity." These upgrades aim to transition from a Proof-of-Work (PoW) consensus mechanism to Proof-of-Stake (PoS) and introduce improvements like sharding and Data Availability Sampling (DAS) to enhance network scalability, efficiency, and security. Dencun and Pectra were critical milestones on this roadmap, and the Fusaka upgrade further builds on this by introducing gas limit optimizations and PeerDAS technology, laying the groundwork for future parallel execution.
In-Depth AI Insights
What are the broader implications of these technical upgrades for Ethereum's competitive positioning and its ecosystem? Ethereum's continuous upgrades, particularly PeerDAS introduced in Fusaka and future parallel execution with Glamsterdam, significantly enhance its competitive edge as a leading smart contract platform. By improving scalability, reducing Layer 2 transaction costs, and enabling more efficient block processing, Ethereum is poised to solidify its dominance in DeFi, NFTs, and Web3. - Attracting More Applications and Users: Improved performance and lower costs will entice more developers and users to build and interact within its ecosystem, driving network effects and overall value growth. - Addressing Competition: These enhancements help Ethereum better compete with high-throughput blockchains like Solana, Avalanche, and Cardano, which have historically gained traction in specific use cases due to their speed and cost advantages. - Institutional Adoption: A more stable, predictable, and cost-efficient network could encourage greater institutional investor and enterprise-level application consideration for Ethereum, although its reputation regarding energy consumption still requires ongoing management. Beyond the technical improvements, what are the potential investment risks or overlooked challenges associated with such complex network upgrades? While upgrades are designed to improve the network, their complexity introduces inherent risks and challenges that investors should not overlook. - Execution Risk and Bugs: Each major upgrade carries the risk of introducing new vulnerabilities or unforeseen bugs, which could lead to network disruptions, asset loss, or confidence erosion. While testnets mitigate some risks, the real-world environment of mainnet deployment is often more challenging. - Developer Ecosystem Adaptation: Constant technical changes require developers across L1 and L2 to continuously adapt their infrastructure and code, potentially leading to development costs, compatibility issues, and bottlenecks in innovation. - "Upgrade Fatigue": Frequent and complex upgrades can lead to "upgrade fatigue" among node operators and validators, increasing their operational burden and potential for errors, which could affect the network's decentralization. - Expectation Management: Market expectations for each upgrade are often high, and if the upgrade doesn't immediately deliver perceived significant improvements or encounters unexpected issues, it could lead to short-term market volatility or investor disillusionment. How might the Fusaka upgrade impact the "Layer 2 scaling solution" landscape, and what are the long-term implications for their value proposition? The Fusaka upgrade, particularly the introduction of PeerDAS, has profound implications for the Layer 2 (L2) scaling solution ecosystem, presenting both opportunities and potential shifts in the competitive landscape. - Evolving Cost Advantage: PeerDAS, by making L2 data availability cheaper, directly lowers the operational costs for all L2s. This could diminish the differentiation of some L2s that primarily relied on a cost advantage, as the base layer improvement benefits all. - L2 Throughput Potential: Lower data costs mean L2s can process higher volumes of data, leading to even greater transaction throughput and lower per-transaction fees, further enhancing their scalability. - Ecosystem Integration: These base-layer improvements solidify Ethereum's position as the central hub for L2s, making L2 solutions an even more integral part of Ethereum's long-term scaling strategy. This could foster closer integration and interoperability among L2s. - Competitive Landscape Adjustment: L2s that possess unique advantages in terms of their technical stack, developer experience, or specific application niches will continue to thrive. However, L2s primarily focused on cost leadership may need to re-evaluate their value proposition in light of the base layer's enhanced cost efficiency.