Ethereum Fusaka Upgrade Goes Live Today: Experts Predict Potential Supply Crunch Ahead

Overview

The Ethereum Fusaka Upgrade is set to go live, bringing substantial improvements to the network’s functionality. Experts believe this upgrade could lead to a significant supply crunch for ETH, potentially impacting its price positively amid current market challenges.

What Happened?

The Fusaka Upgrade integrates features from earlier upgrades, including Osaka, Fulu, and PeerDAS, but most notably addresses one of Ethereum’s longstanding issues: the minimal fees generated by Layer 2 (L2) solutions. While L2 solutions have been beneficial for Ethereum’s security, they have historically contributed little to the network’s fee revenue. This has resulted in a situation where significant L2 activity did not lead to substantial ETH being burned, despite a large percentage of Ethereum transactions occurring on these solutions.

The upgrade introduces EIP-7918, which requires L2 transactions to pay real fees to the Ethereum network. This change ensures that every L2 transaction will contribute to the burning of ETH, a process that was not guaranteed before. Analysts view this adjustment as one of the most significant shifts in value for Ethereum since the implementation of EIP-1559.

The Fusaka Upgrade is expected to expand the sources of ETH burn from just Layer 1 (L1) transactions to include all L2 activities. Previously, most ETH burn came from mainnet transactions, leading to slight inflation as L2s made transactions cheaper. Following the upgrade, every L2 blob will incur a minimum cost that will be burned. As L2 adoption grows, the rate of ETH burned is anticipated to increase, enhancing ETH’s scarcity.

Impact on the crypto market

• The Fusaka Upgrade could lead to a shift from inflation to deflation for ETH, marking a significant change in the network’s economic model.
• Analysts project that the additional ETH burn from L2 activities could significantly increase the overall burn rate, potentially leading to a net neutral or slightly deflationary state for ETH.
• Enhanced Layer 2 growth and reduced bandwidth requirements may result in more transactions and higher fees collected, further increasing ETH burn.
• The increase in block gas limits allows for more transactions per block, facilitating higher fee collection and contributing to the burn.
• Overall, the Fusaka Upgrade represents a pivotal moment for Ethereum, as it scales effectively while also monetizing that growth, which could attract more users and investors.

Updated: 12/3/2025, 8:29:27 PM