Ethereum Faces Post-Fusaka Structural Shifts

For context, a blob is Ethereum’s primary data availability mechanism introduced in March 2024 - a temporary data container that allows rollups to post large batches of transaction data to Layer-1 (L1) at significantly lower cost, without permanently increasing the chain’s state.

Fusaka is a structural inflection point. It marks Ethereum’s transition toward an institution-grade settlement layer, designed to deliver the stability, predictability and throughput required to onboard trillions in traditional financial flows. 

Concurrently, it enables the rollup ecosystem to evolve from fragmented, self-contained chains into a standardized execution layer, realigning L1 capacity, data availability, and economic incentives with Ethereum’s architecture. 

Fixing Ethereum’s value-capture gap 

The successful Ethereum Fusaka upgrade has pushed ETH gas fees to their lowest levels in over eight years, while Ethereum execution throughput – gas consumed per second as a proxy for total computational work – is printing all-time highs. 

But beyond the scalability headline, Fusaka directly addresses one of Ethereum’s most persistent structural issues: weak value capture at the L1 level as activity migrated to L2s. 

Before Fusaka, nearly 90% of Ethereum transactions occurred on L2s, with fees paid for blob data close to zero, according to Sandmark analysis. This meant L2 usage scaled, but ETH burn remained largely confined to L1 activity, creating a growing disconnect between network usage and ETH’s monetary dynamics. 

Fusaka rewrites this equation. By enforcing real blob pricing, L2s now pay a minimum fee explicitly linked to the L1 base fee, and that fee is fully burned, directly feeding into long-term ETH supply reduction. Ethereum has, in fact, expanded the burn mechanism from L1 into the entire rollup stack. 

Blob fees as the new burn engine 

Since activation, blob fees have become the dominant source of ETH burn, accounting for up to 98% of total burned ETH. Over the past month, approximately 12,639 ETH has been burned, with 11,685 ETH ($38.4mn) burned in the last week alone.

This surge is directly tied to higher blob pricing following the activation of BPO-1 on 9 Dec, which raised the blob target to 10 and the maximum to 15 blobs per block. As a result, average blob gas prices jumped from ~8.3 gwei on average since Blobs’ introduction in Mars 2024, to ~356 gwei last week - a 43× increase, according to UltraSoundMoney data. 

As L2 usage continues to expand, blob demand scales alongside it, and with it, ETH burn. Lower operational overhead allows rollups to post more data, but each additional blob now carries a meaningful fee that is burned at the protocol level, making them a structural scarcity flywheel rather than a dilutionary force. 

With their growth now tightly coupled to ETH burning through blobs, and L1 capacity expanding in parallel, Ethereum may be returning to deflation for the first time in years, not despite rollups, but because of them. 

Relative market strength post-Fusaka 

During the days bracketing the Fusaka activation, ETH has outperformed BTC, rising +5.38% after retracing from a +23.13% rally during the post-upgrade week, while BTC is down –4.75% over the same period. 

While short-term price action should not be overinterpreted, the relative performance suggests a shift in marginal positioning around ETH specifically, rather than a broad market move. 

(Source: Coin Metrics)

Positioning data in derivatives markets aligns with this shift.  In that same window, ETH futures open interest is up +13.27% from $20.94bn to $23.72bn, while Bitcoin open interest remains largely flat, pointing to growing engagement from market participants focused on Ethereum. The move appears driven by ETH-specific positioning rather than general market exposure. 

(Source: Coin Metrics)

Options positioning adds an important layer of nuance. ETH’s net open-interest market value across calls and puts is broadly flat, as call open interest rose from $165.3mn to $221.8mn since Fusaka and narrowed the gap with puts. 

In contrast, Bitcoin options remain heavily skewed toward downside protection, as investors are heavily paying up for puts. 

This asymmetry suggests that while the market is not aggressively bullish on ETH, perceived tail risk has compressed, pointing to a shift in how Ethereum is being framed: the market is increasingly willing to price in protocol-level improvements. 

Fusaka’s hidden levers 

Post-Fusaka, one of the most underappreciated features sits at the intersection of capacity, fee mechanics, and Ethereum’s long-term interoperability roadmap. With EIP-7935, the L1 gas limit rises to 60mn from 36mn, expanding effective execution capacity by roughly 66%. 

More room per block allows more transactions to clear, mechanically increasing base-fee collection - and because base fees are burned, higher throughput directly translates into structurally higher ETH burn on mainnet, reinforcing Ethereum’s fee-driven monetary flywheel alongside growing L2 burn. 

At the same time, EIP-7825 quietly lays critical groundwork for Ethereum’s end-state architecture. By imposing a hard cap of ~16.8M gas per transaction, it prevents single “mega-transactions” from monopolizing entire blocks. 

These are transactions that would otherwise consume most or all of a block’s gas limit, crowding out other users’ transactions and forcing them to wait for subsequent blocks, even as block gas limits continue to rise. 

This breaks execution into bounded, predictable, and parallelizable units, dramatically lowering the cost and latency of generating Zero-Knowledge (ZK) proofs – cryptographic proofs that allow the correctness of computation to be verified without re-executing it. 

In practice, this is a prerequisite for fast cross-chain settlement. When proof generation becomes cheap and near-instant, interoperability no longer relies on external bridge operators or multi-sig trust assumptions. 

Instead, proof-based interoperability can live directly at the Ethereum L1 layer, where cross-chain state transitions are verified by Ethereum itself, allowing traditional bridges to fade in favor of native, trustless, mathematically enforced settlement. 

Together, Fusaka’s capacity expansion and transaction-level constraints form the physical foundation for the Ethereum Interoperability Layer (EIL) – a future where users, liquidity, and applications move seamlessly across chains, and blockchain complexity is fully abstracted away from the end user.