The highly anticipated Fusaka Upgrade for Ethereum is on the verge of going live on Wednesday, heralding significant enhancements to the network’s overall functionality. 

Analysts contend that this pivotal development could usher in a considerable supply crunch for ETH, potentially boosting its price during a challenging period for the broader cryptocurrency market.

Layer 2 Solutions To Boost ETH Burn

According to analysts at Bull Theory, the Fusaka Upgrade integrates components from previous upgrades—Osaka, Fulu, and PeerDAS—but its most impactful feature is its resolution of one of Ethereum’s biggest challenges. 

Layers 2 (L2) solutions have long utilized Ethereum’s security while contributing minimal fees back to the network. Despite L2 solutions like Base, Arbitrum, Optimism, and zkSync generating millions in fees from users, the fees recorded on Ethereum tended to diminish to nearly zero when they posted their data. 

Consequently, this meant that significant L2 activity did not result in substantial ETH being burned, even though approximately 85% of Ethereum transactions now occur on these Layer 2 solutions.

The Fusaka Upgrade fundamentally changes this dynamic. A key enhancement is EIP-7918, which mandates that Layer 2 transactions pay real fees to Ethereum. 

This adjustment ensures that every L2 transaction will contribute directly to the burning of ETH—something that was not previously guaranteed. The analysts assert that this feature represents one of the most significant value shifts since the introduction of EIP-1559.

Post-Fusaka Projections

The upgrade is further expected to broaden the scope of ETH burn from being predominantly derived from Layer 1 (L1) transactions to encompassing all L2 activity. 

Historically, most ETH burn has originated from mainnet transactions; thus, the network saw slight inflation in 2024–2025 as Layer 2s made transactions cheaper, leading to a decrease in ETH burn while staking continued to issue new ETH. 

Post-Fusaka, every L2 blob will incur a minimum cost, which will be burned. As Layer 2 adoption increases, the rate at which ETH is burned will also rise, contributing to increased scarcity of ETH.

This enhancement positions Ethereum to shift back towards deflation for the first time in several years. Currently, ETH issues around 620,000 new tokens annually for stakers while burning approximately 350,000 tokens. This results in a net slight inflation. 

However, projections following the Fusaka Upgrade, even with conservative estimates, suggest that the additional burn from L2 activity could range from 200,000 to 400,000 ETH per year. 

Combined with existing burn rates, this could bring the total to over 600,000 ETH, leading to a net neutral or slightly deflationary state for ETH. 

More bullish models predict that if L2 adoption flourishes and demand for blobs rises, burn rates could soar to between 900,000 and 1.2 million ETH annually, resulting in a supply decrease of 200,000 to 300,000 ETH each year. 

Monetary Transformation For Ethereum?

Another notable aspect of the Fusaka upgrade is PeerDAS, which enhances Layer 2 growth by reducing bandwidth requirements by 85%. This efficiency allows L2 solutions to publish more blobs at lower costs, resulting in increased fees and, consequently, more ETH burned.

The upgrade also increases the block gas limit from 36 million to 60 million, allowing more transactions to fit within each block. This increase means that more transactions can occur, leading to higher fees collected and a corresponding rise in burning. 

Furthermore, lower fees for transactions—such as swaps, bridges, on-chain gaming, and social applications—will likely drive more usage, resulting in increased transactions and higher ETH burn.

Ultimately, the analysts believe that the Fusaka Upgrade represents a significant monetary transformation for Ethereum, indicating that the network is not only scaling but also beginning to monetize that scaling effectively.

Featured image from DALL-E, chart from TradingView.com

Over the past few weeks, the price of Ethereum has been on a downward trend due to a highly volatile market environment. ETH’s bearish action appears to have hampered on-chain activities, as evidenced by a decline in its total transactions carried out within a monthly period.

A Quiet Month For The Ethereum Network

Ethereum’s on-chain activity appears to have slowed down alongside the ongoing decline of ETH’s price. The blockchain, which is typically bustling with contract calls, exchanges, and transfers, now feels a little more roomy, suggesting a cooling pulse beneath the surface.

After examining the Transactions on the Ethereum Network metric in the monthly time frame, Everstake.eth, a market analyst and the head of the ETH segment at Everstake, revealed that the blockchain has recorded its worst month of the year. While price has declined, ETH’s total transactions executed in a month, particularly November, experienced a cool-off.

According to the data, the overall number of transactions carried out on the Ethereum network in November alone was approximately 32.2 million. Although this figure may seem large, it actually marks the lowest monthly count in the past 12 months.

Such a drop in transactions may suggest the renewed waning appetite for the network. In addition to suggesting a retreat, this delay reads more like a collective pause as users catch their breath, procedures recalibrating, and the market adjusting to its new rhythm. 

Everstake.eth highlighted that this kind of cooldown usually occurs when the market moves into a wait-and-see phase. During this phase, capital is observed sitting on the sidelines while developers continue to build on the blockchain. Despite this trend, the network still records more than 33 million transactions in a quiet month, which reflects its robust strength.

At a time like this, the expert noted that user behavior typically follows the market sentiment. As seen in the past, on-chain activity tends to cool down when volatility drops. However, Ethereum still retains the status as the most reliable network even during slow phases.

With the Fusaka Upgrade set to hit the market, Everstake.eth predicts that ETH transactions will see explosive growth. “If this is the worst month, imagine what the best will look like after Fusaka rolls out. It will be huge,” the expert stated.

ETH Active Transactions Pick Up

The monthly transactions may have slowed down, but the active addresses on the Ethereum network are heating up again. Leon Waidmann, the head of research at On-Chain Foundation, reported that active addresses throughout the entire ecosystem, Layer 1 and Layer 2s, bounced back above 9.5 million this week.

This surge points to a quiet resurgence of interest, utility, or a group readiness for the future. Waidmann highlighted that this marks the first meaningful reversal after several weeks of downside action.

ETH layer 2s such as Base, Arbitrum, Optimism, and World Chain have witnessed a strong rebound following a period of decline. Furthermore, multi-chain activity is starting to stabilize after the drop in Q3. These factors are painting a bullish picture for the network and its price prospects.

Ethereum’s upcoming Fusaka upgrade is emerging as a major development that could reshape how value flows from Layer-2 networks back to ETH.

Today, the majority of economic activity generated by rollups—including MEV extraction, sequencing revenue, and transaction ordering—remains siloed at the L2 level, accruing to independent operators rather than to Ethereum itself. New analysis from on-chain intelligence firm Nansen suggests that Fusaka may shift this balance.

A New Foundation for Based Rollups

Fusaka introduces the technical infrastructure required for “based rollups,” a model where Ethereum validators take over the responsibility of sequencing transactions for L2s. Instead of relying on external or proprietary sequencers, L2s could integrate directly with Ethereum’s validator set, aligning their incentives more tightly with the base layer.

“Fusaka itself does not guarantee value accrual to ETH, but it enables it,” said Nicolai Søndergaard, Research Analyst at Nansen. “The upgrade introduces the base infrastructure for based rollups, where Ethereum validators take over L2 sequencing.”

Søndergaard explained that if rollups adopt this structure, L2 MEV would begin flowing to ETH stakers, fee burn would increase due to higher blob demand, validator rewards would rise through pre-confirmation revenue, and Ethereum would start capturing a greater share of the economic activity that currently accumulates at the L2 level.

He explains, however, that none of this is automatic. The long-term impact depends entirely on whether L2 teams choose to abandon their existing sequencing models.

Capital Markets Anticipate Structural Improvements

The potential benefits of Fusaka extend beyond validator economics. According to Edwin Mata, CEO and co-founder of enterprise tokenization platform Brickken, the upgrade represents a material improvement to Ethereum’s settlement architecture.

With reduced data loads for rollups and validators, the network becomes more predictable in both performance and cost, a key requirement for regulated institutions assessing whether a public blockchain can support issuance and post-trade processes at scale.

Mata notes that this predictability is essential for capital-market participants who need reliable settlement environments. By strengthening Ethereum’s consistency, Fusaka enhances its appeal as a venue for institutional-grade financial activity.

A More Efficient Environment for Tokenized Assets

For the growing real-world asset sector, Fusaka could streamline key operational mechanics. Lower fees and increased throughput on L2s create a more efficient sector for the lifecycle of tokenized instruments, allowing for smoother transfers, faster reconciliations, and greater dependability during distribution events.

Mata also pointed out the upgrade’s impact on network resilience. Fusaka lowers the operational threshold for node participation, which broadens the validator base and reduces concentration risk. For financial markets that depend on systems with no single point of failure, greater decentralization is a fundamental advantage.

As the Ethereum ecosystem prepares for Fusaka, analysts and industry leaders will be watching whether L2s embrace the base-rollup model. If they do, the upgrade could mark a turning point in how Ethereum captures value from the ecosystem it anchors.

The post Fusaka Upgrade Could Reshape How Ethereum Captures Layer-2 Value, Says Nansen appeared first on Cryptonews.

A pseudonymous analyst has set off a new narrative around Ethereum’s upcoming Fusaka upgrade, arguing it could be the most favorable event ever for ETH as an asset by finally turning Layer-2 networks into meaningful ETH burners.

On X, crypto pundit Kira Sama framed Fusaka, scheduled for December 3, as a structural shift in Ethereum’s fee economics. The core of the thesis is a single change: EIP-7918.

“Price wise, Ethereum Fusaka upgrade on december 3rd, will be the most bullish upgrade for eth the asset ever, why? One reason. ‘EIP 7918’,” Kira wrote, calling it “the next big catalyst for eth burn.”

Ethereum L2 Will Burn ETH

Kira’s argument rests on how Ethereum currently treats L2s. Since the rollup-centric roadmap took shape, Ethereum’s base layer has effectively subsidized L2 data availability. In his words, “for a long time, ETH L1 charged zero base fees to L2s, while L2 deployers made millions of profits. So L2s haven’t burnt any meaningful eth.” That subsidized regime has fueled explosive L2 growth but also limited how much L2 usage translates into ETH burn.

EIP-7918 is designed to change that by tying L2 data costs more tightly to mainnet gas prices. Kira summarizes it as follows: “L2 fees will be bounded by the execution cost which will help us reach L2 fees price discovery faster. It also helps maintain the fees during spikes so that L2 users won’t be rugged from absurd tx fees. Win-win.” In practice, that means rollups will face a non-trivial, protocol-enforced minimum on what they pay Ethereum for posting their batches.

Crucially for ETH holders, those fees are paid in ETH and a portion is burned under the EIP-1559 mechanism. Kira argues that as L2 throughput scales, this will become a dominant driver of ETH’s burn dynamics: “They will just pay their fair share to Ethereum L1 and burn meaningful eth. It will be slow and steady at the beginning. This will eventually result in burning millions of dollars of eth long term and L2s will be main driving force of making eth deflationary.”

The narrative becomes more aggressive when Kira extrapolates to corporate and institutional rollups. He lists a series of existing and anticipated L2s and claims that “Coinbase’s base will burn eth, Robinhood’s L2 will burn eth, OpenAI’s Worlchain will burn eth, Sony’s Soneium will burn eth, Alibaba’s Jovay will burn eth, UAE’s ADI chain burn eth, Kraken’s Ink will burn eth, Lighter will burn eth, Deutsche Bank’s Memento chain will burn eth, Arbitrum will burn eth etc etc etc. Corporations will start burning eth.”

From that, he extends the thesis to a broader, highly bullish vision: “Every company in the world will launch their own layer 2. Every alt-L1 will become L2 and start burning eth. Eth inflation will shrink.” While those universal claims go far beyond what the upgrade itself guarantees, they capture the heart of the bullish narrative: if enough economic activity migrates onto Ethereum-secured L2s that must pay non-negligible base fees, Ethereum becomes the settlement and value-capture layer beneath corporate and institutional chains.

Kira explicitly compares Fusaka to the London hard fork that introduced EIP-1559 in 2021. “When Ethereum introduced burn through eip-1559 in 2021, it lifted the whole market up,” he wrote. “Everyone will be caught off guard this time as well. L2s burning eth incoming. Bullish eth. Bullish L2s.” For now, Kira is clear about his own conclusion: “December 3rd, tik-tok. The ticker is ETH.”

At press time, ETH traded at $3,022.