Ethereum's next major network upgrade, Fusaka, is set to activate on December 3. The core proposal, EIP-7918, fundamentally alters the fee structure of Layer-2 (L2) networks by linking their costs directly to mainnet gas prices. Analysts widely expect this change to significantly boost ETH burn from L2 activity, potentially replicating the deflationary effects seen after the 2021 EIP-1559 implementation.
EIP-7918: Setting a Minimum Cost Floor for L2 Batches
Under EIP-7918, L2 networks will face a minimum fee when posting batches to the mainnet, based on the current gas price of the base layer. This eliminates the ability of L2s to escape mainnet cost pressures by compressing data or submitting inefficient batches. Analyst Kira Sama notes that the new mechanism enforces alignment between L2 activity and Ethereum's fee market, ensuring fair compensation for the mainnet resources used. Such alignment directly increases the amount of ETH burned, as higher gas fees for batch posting lead to more ETH being destroyed.
Technical Upgrades: Higher Gas Limit and Faster Transactions
Beyond fee reform, the Fusaka upgrade includes several technical enhancements. The plan raises the block gas limit to approximately 60 million (currently ~30 million), allowing each block to process more transactions and reducing congestion. Additionally, improvements to the data availability layer will boost rollup data throughput, enabling faster confirmation and lower costs for L2 transactions. These upgrades aim to strengthen Ethereum's role as a settlement layer and support the expanding L2 ecosystem.
Major L2 Projects Face Higher Costs
Leading L2 projects such as Coinbase's Base, Robinhood's Wallet, and Sony's Soneium will incur higher batch posting costs under the new rules. In the short term, these projects may need to adjust user fees or optimize data compression strategies. In the long run, the higher costs could incentivize L2s to adopt data sharding or EIP-4844 (Proto-Danksharding) more aggressively to reduce data publication costs, maintaining competitiveness. However, some argue that higher L2 fees could suppress user activity, potentially limiting long-term ETH burn growth.
Potential Impact on ETH Supply
Market discussions around the Fusaka upgrade often draw parallels with the burn mechanism of EIP-1559. That upgrade pushed ETH into a deflationary phase by consuming the base fee, driving a significant price rally. Although ETH supply has since turned net inflationary, if Fusaka successfully channels L2 fee pressure to the mainnet, annual ETH burn could double from the current ~300,000 ETH or more. Analysts emphasize that the outcome hinges on whether L2 adoption growth offsets unit cost declines. There are also concerns that the upgrade might trigger a migration of L2s to cheaper alternative blockchains, weakening Ethereum's network effects.
Upgrade Timeline and Next Steps
Fusaka testnet deployment is expected to begin in Q3 2025, with mainnet activation set for December 3, 2026. Before then, Ethereum core developers will finalize details through a series of additional EIPs. Notably, the upgrade does not include highly requested features like account abstraction or privacy enhancements, which may be addressed in the future Hegota upgrade (proposed for May 2026). Overall, Fusaka marks a critical step in Ethereum's "L2-centric roadmap", aiming for sustainable ecosystem growth through economic incentives and technical optimization.