Ethereum has reached a significant technological milestone that many believed was years away, particularly amidst ongoing discussions surrounding Bitcoin. The activation of the Fusaka upgrade on December 3 has led to a remarkable decline in average gas fees on the Ethereum mainnet, now ranging from $0.01 to $0.10 for basic transactions.
This transformation is largely attributed to the implementation of PeerDAS (Peer Data Availability Sampling), a method enabling validators to confirm the existence of data without the need to download entire data “blobs.” In conjunction with a 33% increase in the block gas limit, which has risen from 45 million to 60 million, this upgrade effectively mitigates the congestion issues that have historically plagued Ethereum during the bull markets of 2021 and 2024.
As a result, for the first time, Ethereum”s Layer-1 is now economically viable when compared to high-speed alternatives like Solana. Despite this significant advancement, the broader market sentiment remains cautious, with the Fear and Greed Index reflecting an “Extreme Fear” status at 21, as ETH bulls work to maintain the critical $3,000 support threshold.
Interestingly, the reduction in gas fees has led to a decrease in the effectiveness of the network”s “burn mechanism” under EIP-1559, sparking short-term inflationary concerns among traders. However, proponents of the Fusaka upgrade assert that the long-term benefits lie in establishing a framework for Global Dollar Liquidity Settlement, positioning Ethereum as a low-cost infrastructure for tokenized Treasury bills and stablecoins.
As the cryptocurrency landscape evolves, Ethereum”s advancements may pave the way for broader adoption and utilization, particularly in decentralized finance (DeFi) and beyond.
