Fusaka's Impact: Enhanced Layer 2 Experience and Lower Fees

The highly anticipated Ethereum upgrade, known as Fusaka, merges the concepts of "Fulu" (consensus) and "Osaka" (execution) to transform how the network manages data and transaction costs, all while preserving the familiar user experience.

At its core, Fusaka signals a clear trajectory: Ethereum's primary blockchain will continue to serve as the ultimate settlement and data-availability platform, while day-to-day transactions migrate to more cost-effective and efficient rollups.

However, the pivotal question regarding Fusaka's ability to lure users back to Layer 1 has already been addressed: it won’t. Instead, it will make it increasingly challenging to depart from Layer 2 solutions.

The technical foundation of Fusaka revolves around improved data availability, sampling techniques, and blob management, which collectively aim to make posting on Layer 2 more affordable and efficient. Central to this effort is the main proposal, EIP-7594 (PeerDAS), which permits nodes to sample only portions of rollup data—referred to as "blobs"—rather than requiring a complete download.

This innovation significantly boosts blob capacity while simultaneously slashing bandwidth expenses for validators, a crucial factor in enhancing Layer 2 throughput.

Additionally, EIP-7892 introduces a mechanism known as “Blob Parameter-Only” forks (BPOs), allowing for a gradual increase in the number of blobs processed per block (for instance, scaling from 10 to 14 or 15 to 21) without the need for substantial protocol rewrites.

This flexibility enables developers to fine-tune Ethereum's data capacity without having to wait for comprehensive upgrades. Meanwhile, EIP-7918 establishes a base fee for blobs, ensuring that the auction prices for data space do not plummet to negligible levels during periods of low demand.

Beyond these technical improvements, the upgrade also focuses on enhancing user experience and security. For instance, EIP-7951 integrates support for secp256r1, the cryptographic curve utilized in WebAuthn, facilitating passkey logins across Ethereum wallets. Additionally, EIP-7917 introduces deterministic proposer look-ahead, a subtle yet impactful modification that aids pre-confirmation systems in anticipating block producers, thereby expediting transaction confirmations.

Furthermore, EIP-7825 imposes a cap on transaction gas to mitigate denial-of-service threats, while EIP-7935 adjusts default block gas targets to uphold validator stability.

These enhancements are already operational on testnets such as Holesky and Sepolia, with a full launch on the mainnet anticipated in early December.

While Fusaka doesn't promise reduced gas fees for Layer 1, its primary goal is to decrease costs associated with Layer 2 transactions. By enabling rollups to submit more data at a lower price, this upgrade optimizes the economic models for networks like Arbitrum, Optimism, Base, and zkSync.

Internal projections indicate that rollup fees could drop between 15% and 40% under standard circumstances, potentially reaching up to 60% if the supply of blobs exceeds demand for an extended duration. On the Ethereum mainnet, gas prices are expected to remain relatively stable, although future adjustments to block gas targets could lead to a reduction of an additional 10-20%.

The updates related to passkeys and proposers could significantly enhance the user experience on Ethereum. With WebAuthn integration, wallets can adopt biometric or device-based authentication methods, alleviating the burden of managing seed phrases and passwords. Moreover, with the implementation of predictable proposer schedules, users can anticipate near-instant confirmations for routine transactions, particularly on rollup networks.

The overall effect of these changes is that Ethereum will become a more seamless platform for users without drawing them back to Layer 1. The infrastructure will become more efficient, yet it will remain geared towards the rollup pathway.

Layer 1 for Settlement, Layer 2 for User Experience

Ethereum's architecture has evolved beyond a mere debate between monolithic and modular designs; it has embraced modularity by design. Layer 1's role is to act as a secure base for settlement and data availability, while Layer 2 solutions enhance user interaction, creating a more fluid and efficient ecosystem.