On October 14, Ethereum developers successfully rolled out the Fusaka upgrade on the Sepolia testnet. Its launch on the mainnet is coming later this year, and it will be yet another step towards the multi-layered transition to Ethereum 2.0, making Ethereum a more attractive network for users than it was before.
The launch on the testnet took place just when Ethereum first dropped to $3,900 and then surged back above the $4,000 level, despite the recent massive market liquidations and spot Ethereum outflows.
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The Fusaka upgrade lands on Ethereum’s long road to scalability
Ethereum developers aimed at upgrading the network on a large scale and started implementing Ethereum 2.0 three years ago. The first step on this long and difficult path was taken in September 2022, when they launched the Merge upgrade. It started the gradual transition from the Proof-of-Work to the more energy-saving and environment-friendly Proof-of-Stake algorithm.
The Merge was followed by several other upgrades, including Shanghai-Capella in 2023 and Dencun in early 2024 (also known as Proto-Danksharding, which introduced so-called blobs – a new cheap and efficient way to store transaction data). Now, the time has come to start introducing Fusaka. This upgrade is expected to allow Ethereum to increase its scalability and run more complex decentralized apps (dapps). Besides, Fusaka will move Ethereum closer to institutional-grade performance, while the network will remain loyal to its core principles of maintaining security and decentralization.
The release of the Fusaka upgrade on the mainnet is scheduled for early December 2025. This innovation will radically expand the gas limit that can be used on the network from approximately forty-five million to one hundred and fifty million. This will greatly increase the number of smart contracts to be executed and rollup interactions in each block. But Fusaka will also offer a lot more than just capacity expansion. The upgrade will also introduce new methods of handling data. Peer Data Availability Sampling, aka PeerDAS, is one of them. It allows validators to prove data integrity on the blockchain without having to download entire blobs by to do it using small portions of data from various sources instead. This will make data validation much faster and lighter, and will also reduce the load on Ethereum nodes and improve network efficiency in general.
Another important component of Fusaka is the addition of Verkle Trees. This is a modernized data structure, which makes it easier for validators to verify proofs by making them smaller. This process will accelerate operations on the network and will also prepare it for other scaling processes in the future. These systems are already being tested on several testnets, including Sepolia and Holesky. Developers are currently busy finalizing the code and running bug bounty programs to ensure the stability of these components of major importance. Thus, Fusaka is expected to become the most significant Ethereum upgrade since The Merge by helping to bring in the new era of higher speed and bigger capacity for Ethereum.
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Crypto ETF outflows amid market turbulence
In the meantime, this week, the cryptocurrency market has faced large outflows from both Bitcoin and Ethereum-based spot exchange-traded funds (ETFs). This happened after last week, the market faced an immense amount of liquidations, totalling more than $1 billion. The current market turbulence caused by Donald Trump’s escalation of the trade war with China (he promised to implement additional 100% tariffs on all imports coming from China to the US as of November 1) has shaken institutional confidence in crypto assets, turning investors towards gold.
This week, Bitcoin and Ethereum ETFs faced roughly $750 million worth of net outflows. Ethereum funds have lost a total of $428.5 million, with BlackRock’s ETHA leading the way here, as it experienced $310 million. As for Bitcoin ETFs, the leader in losses here has been Grayscale’s GBTC (minus $145.4 million) and Bitwise BITB (which lost $15.64 million).
Ethereum is currently trading above the $4,100 level after recovering from its 8.21% fall faced earlier this week, when ETH declined to $3,940. Bitcoin is changing hands at $112,050 after losing the $115.910 mark earlier this week. BTC dropped to $110,730 first but then managed to recover to the aforementioned trading level, where it is sitting at the moment.
While Ethereum’s tech fundamentals are vastly improving, at the moment, institutional investors seem to be focused on liquidity and macro safety rather than tech innovation, hence the large ETF outflows this week. The crypto market is currently being driven by fear and momentum trading rather than technological innovation. However, investors are watching out for crucial developments to start buying again.
