If Ethereum’s next update, particularly the Fusaka upgrade scheduled for December 2025, succeeds as planned, it could transform Ethereum into the backbone of the financial internet by dramatically enhancing scalability, reducing costs, and improving network efficiency. This would enable Ethereum to support a vast array of decentralized financial applications and services at a global scale, potentially reshaping how money and financial data flow online.
The Fusaka upgrade is a critical milestone in Ethereum’s multi-phase roadmap aimed at scaling the network to handle massive transaction volumes while maintaining security and decentralization. It combines improvements on both the execution layer (Osaka) and the consensus layer (Fulu), introducing key innovations such as PeerDAS (Peer Data Availability Sampling). PeerDAS revolutionizes how data availability is managed by allowing validators to sample data instead of downloading everything, significantly reducing hardware demands and enabling Ethereum to scale blob space efficiently. This makes Layer 2 rollups—secondary frameworks that bundle transactions off-chain and submit proofs on-chain—much cheaper and faster, which is essential for handling high throughput without congesting the main chain[3][4][5][9].
Ethereum’s broader scaling strategy, known as The Surge, includes Proto-Danksharding (already introduced in the Dencun upgrade) and plans for full Danksharding by 2026. Danksharding divides Ethereum into multiple shards, each processing transactions and data in parallel, which could push Ethereum’s capacity to over 100,000 transactions per second across Layer 1 and Layer 2 combined. This is a monumental leap from current throughput and would allow Ethereum to support global-scale financial applications, including decentralized exchanges, lending platforms, stablecoins, and complex smart contracts, all running smoothly and cost-effectively[1][4].
The Fusaka upgrade also recalibrates gas fees and execution limits, optimizing how computation, data, and storage costs are handled. This multidimensional gas pricing approach aims to make transaction costs more predictable and fair, encouraging more users and developers to build and interact with decentralized applications (DApps). By lowering Layer 2 operational costs and increasing throughput, Fusaka directly benefits rollups like Arbitrum, Optimism, and zkSync, which are crucial for scaling Ethereum’s ecosystem[1][4][5][7].
Beyond technical scalability, Ethereum’s roadmap includes enhancements such as account abstraction, which simplifies user interactions by enabling features like social recovery and gasless transactions. These improvements make Ethereum more accessible to mainstream users who may not be familiar with complex wallet management or transaction fee mechanics. Additionally, ongoing upgrades like Enshrined Proposer-Builder Separation (ePBS) and Block-level Access Lists (BALs) planned for 2026 will further optimize network performance and security, reinforcing Ethereum’s position as a robust platform for financial services[4].
The implications of Ethereum becoming the financial internet backbone are profound. With the ability to process millions of transactions daily at low cost and high speed, Ethereum could host a new generation of decentralized finance (DeFi) applications that rival or surpass traditional financial institutions in efficiency and accessibility. This would enable seamless global payments, programmable money, decentralized lending and borrowing, insurance, asset tokenization, and more, all without intermediaries. The network’s security and decentralization would provide trust and transparency, addressing many issues inherent in legacy financial systems.
Institutional interest is also expected to grow as Ethereum’s scalability and efficiency improve. The approval and inflows into Ethereum-based exchange-traded funds (ETFs) and the expansion of DeFi total value locked (TVL) indicate rising demand for Ethereum’s financial infrastructure. Regulatory developments and monetary policies will continue to influence adoption, but Ethereum’s proactive upgrades position it well to meet increasing demand and regulatory scrutiny[2][4].
Challenges remain, including competition from other blockchains and concerns about centralization as Layer 2 solutions and rollups become more prominent. However, Ethereum’s strong developer community, continuous innovation, and layered scaling approach provide a resilient foundation. The network’s evolution toward supporting over one million transactions per second across Layer 2 networks and integrating zero-knowledge proofs (zkEVMs) into Layer 1 further future-proofs Ethereum against scalability bottlenecks[4][6].
In essence, if Ethereum’s next update and subsequent roadmap phases unfold as envisioned, the network could become the financial internet backbone by enabling a highly scalable, secure, and user-friendly platform for decentralized finance and beyond. This would mark a fundamental shift in how financial services are built and accessed worldwide, leveraging blockchain technology to create a more open, efficient, and inclusive financial system.