Ethereum's Fusaka Upgrade Launches, Slashing L2 Costs and Propelling ETH Above $3,100

In a landmark development for the blockchain ecosystem, Ethereum has successfully activated its latest major upgrade, dubbed "Fusaka," today at approximately 21:49 UTC. This hard fork, combining improvements to both the consensus ("Fulu") and execution ("Osaka") layers, promises to revolutionize Layer 2 (L2) solutions by making transactions significantly cheaper and faster. On the back of this upgrade, Ethereum's native token, ETH, has surged past the $3,100 mark, reflecting growing investor optimism.

Key Highlights of the Fusaka Upgrade

The Fusaka upgrade builds on previous milestones like the 2024 Dencun upgrade, which introduced "blobs" for temporary data storage to reduce L2 costs. According to Ethereum's official roadmap and developer announcements, Fusaka introduces several critical enhancements:

• This protocol allows nodes to verify data through sampling rather than full downloads, enabling up to 8x scalability for L2 rollups like Optimism, Base, and Arbitrum. By optimizing data availability, it drastically lowers operational costs for users and developers.
• Raised from 30M to 60M, this change improves transaction throughput and efficiency, directly addressing congestion issues on the mainnet.
• Refinements to gas pricing mechanisms aim to make fees more predictable and lower, particularly benefiting high-volume L2 activities such as DeFi swaps and NFT minting.
• Native support for passkey authentication (EIP-7951) enhances user security on mobile devices, while follow-up forks (BPO1 and BPO2) are planned to further boost blob capacity and overall network performance.

Ethereum co-founder Vitalik Buterin emphasized in a recent blog post that these changes are part of a broader strategy to scale Ethereum through L2 protocols, ensuring low fees (often under $0.10 for L2 transactions) while maintaining decentralization. Data from L2Fees.info and analytics platforms like L2BEAT show that post-Dencun, average L2 fees have already dropped by over 70% in 2025, and Fusaka is expected to accelerate this trend, potentially reducing costs by another 50% or more for rollups.

Industry experts, including those from CoinGecko and ARK Invest, highlight that Fusaka positions Ethereum as "digital oil" for the crypto economy, with increased L2 activity driving higher demand for ETH as gas and staking rewards. Total value locked (TVL) in Ethereum L2s has surpassed $40 billion this year, and the upgrade could spur even greater adoption in DeFi, NFTs, and tokenized assets.

ETH Price Reaction

The market has responded enthusiastically to the upgrade. ETH's price climbed above $3,100 in the hours leading up to and following the activation, marking a 4-9% increase in the last 24 hours alone, depending on exchange data. As of this writing, ETH is trading around $3,061-$3,185 USD, with 24-hour trading volume exceeding $30 billion.

This surge aligns with broader crypto market momentum, fueled by:

1. Spot ETH ETFs, including those from Goldman Sachs and BlackRock, have seen record inflows, with over $13 billion in institutional holdings reported in October 2025.
2. Expectations of a crypto-friendly U.S. administration post-election have boosted sentiment, alongside Bitcoin's rally above $93,000.
3. Analysts from CoinCodex and CoinDCX predict ETH could reach $3,850-$3,900 by the end of the week, with longer-term forecasts eyeing $5,500 by year-end if adoption continues.

However, some caution remains. Bearish signals, such as potential breakdowns toward $2,500 support, have been flagged by traders amid regulatory uncertainties from the SEC and global frameworks. Despite this, the Fusaka upgrade's focus on scalability is seen as a counter to criticisms of Ethereum's efficiency compared to rivals like Solana.

What’s Next for Ethereum?

With Fusaka now live, the Ethereum Foundation's Q3 2025 allocation update reveals over $14 million invested in ecosystem projects, including grants for further scalability research. Developers anticipate increased L2 transaction volumes, with daily L2 transactions already topping 1.9 million.

For users on platforms like Optimism and Base, the immediate benefits include faster confirmations and lower fees, making everyday crypto interactions more accessible.