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Cryptocurrency analysis firm Arkham has published a comprehensive assessment analyzing Ethereum's current position, scaling discussions, and the impact of the upcoming Fusaka update.
According to the report, Ethereum remains at the center of the DeFi ecosystem after 10 years, maintaining its lead over rival Layer-1 (L1) networks in terms of total value locked (TVL). However, the biggest debates surrounding the network's future center on critical topics such as the validity of the “digital oil” narrative, the impact of Layer-2 growth on value accumulation on Ethereum, and long-term economic sustainability.
According to Arkham's assessment, Ethereum's price performance lagged behind Bitcoin during the 2024–2025 period, despite ETF inflows and growing institutional adoption. Despite ETH's increasing preference among institutional treasuries, the most pressing question for investors remains how much value is accumulating on the mainnet and how much is remaining in Layer-2 rollups. The growth of the L2 ecosystem significantly increases Ethereum's scalability while simultaneously reinforcing arguments that the value flow on L1 is weakening.
One of the most critical developments in this context is the Fusaka update, arriving on December 3rd. Arkham states that Fusaka will move Ethereum toward a more efficient, modular, and rollup-centric architecture by increasing blob capacity, raising gas limits, and implementing PeerDAS and a data sampling system. These changes are expected to both increase data processing capacity and reduce L2 costs. Thus, Ethereum aims to maintain its security and decentralized nature while supporting the growth of rollups.
Despite Ethereum's strong DeFi dominance and institutional interest by 2025, structural questions remain. ETH's ability to sustain its “digital oil” narrative will depend on how cross-tier value sharing unfolds, the trajectory of gas and data costs, the breadth of the tokenized asset (DAT) economy, and the pace of integration of traditional financial institutions into the ecosystem. According to Arkham, the Fusaka update stands out as the most important step in Ethereum's attempt to address these questions by expanding its technical capacity.
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*This is not investment advice.