Fusaka Upgrade: The Short Layer Revival but Long-Term Challenge for Ethereum

Ethereum completed the Fusaka upgrade in December 2025, achieving notable short-term layer milestones. According to PANews, this upgrade has sent positive signals for network activity, but deep concerns about sustainability are beginning to surface.

Network Activity Surge After Fusaka Upgrade

The Fusaka upgrade has brought significant technical improvements to Ethereum. The data processing capacity of each block has been substantially enhanced, leading to a sharp reduction in transaction fees. As a result, the number of transactions and active addresses on the network have both experienced notable growth in the short term. These figures reflect a short-term recovery of the Ethereum network.

Experts Express Skepticism

However, JPMorgan, one of the leading financial institutions, has issued cautionary perspectives on this recovery outlook. The bank pointed out that historically, Ethereum upgrades rarely lead to sustainable activity growth. JPMorgan’s report suggests that the current revival may be a temporary phenomenon in the short-term layer, and fundamental issues remain unresolved.

Layer 2 and Public Chains Create Competitive Pressure

Ethereum faces structural pressures from multiple directions. Layer 2 networks like Base and Arbitrum continue to grow vigorously, capturing a significant portion of transaction traffic. Meanwhile, competing public chains such as Solana are also attracting community interest. This migration is not temporary but reflects a fundamental shift in the blockchain ecosystem landscape.

Why Short-Term Layer Recovery Is Unsustainable

Beyond competitive challenges, Ethereum also faces impacts from changing market trends. The decline in investor interest in NFTs and meme coins has significantly reduced capital flow into the mainnet. Notably, major applications like Uniswap have migrated to dedicated chains to optimize performance, reflecting strategic shifts among builders within the Ethereum ecosystem.

These developments have contributed to a decline in fee burning on the mainnet, increased ETH supply, and weakened the value of locked assets (TVL) measured in ETH. These indicators point to deeper challenges beyond what short-term layer upgrades can address.

Major Questions for Ethereum’s Future

Although Fusaka has brought positive light to the short-term layer, potential risks still overshadow Ethereum’s long-term growth prospects. The combination of structural competitive pressures, capital migration out of the ecosystem, and behavioral changes among developers all indicate that Ethereum’s challenges are deeper than what technological upgrades alone can solve. The question remains whether Ethereum can maintain its leadership as the short-term layer recovers but structural issues persist.