Ethereum Fusaka: RWA Liquidity Floodgate?

--- Ethereum’s Fusaka upgrade cuts costs, boosts efficiency, and may unlock a new wave of RWA and institutional liquidity across L1, L2s, and ZK ecosystems. --- Ethereum’s biggest upgrade of 2025 is here. Fusaka is live on mainnet. The Fusaka upgrade introduces cheaper gas fees and improved efficiency to the Ethereum network. L2 ecosystems like Linea and protocols like Aave are capitalizing on the upgrade, getting their systems to once again stress-test scaling with more use cases. ---

“Fusaka is Ethereum signaling that cost, performance, and scalability no longer have to be trade-offs.” ---

Key Takeaways

Fusaka improves Ethereum performance and costs by up to 87.5%
PeerDAS enables data compression without meaningful data loss
L2s and DeFi protocols are unlocking \$5B+ in new liquidity
ZK DeFi is emerging as a key beneficiary, especially for RWAs
Ethereum continues to strengthen fundamentals despite muted price action ---

What Is Fusaka, and Why Does It Matter?

Welcome to this episode of Whitepaper, where we’re strictly for education and entertainment, and not financial advice. So let’s get right into it. We all know what Ethereum is—but what exactly is Fusaka, and why does this matter? At the brass tacks, Fusaka is an announcement to the world that Ethereum developers have found a way to improve costs and performance by up to 87.5%, opening the door for entirely new models to exist on-chain. ---

How Fusaka Improves Scaling

When it comes to scaling data transfer, you generally have two choices:

Increase the total size of storage
Reduce the size of the transacted data Both have their trade-offs, but it loosely comes down to higher maintenance costs or potential data loss in operations. Both are expensive decisions. But blockchain scaling ultimately means lower transaction costs and higher functional limits before the network breaks into gas-fee spikes. In the case of Fusaka, Ethereum found a way to compress data without substantial data loss. This is done through the introduction of PeerDAS, or Peer-to-Peer Data Availability Sampling. It’s an iteration of sharding Ethereum blobs even further, leading to an 8× efficiency gain. Because data is broken into smaller pieces, less computation power is required from node validators, reducing network stress and resulting in cheaper gas fees. This also means that L2 rollups receive an indirect performance upgrade through cheaper fees and better load balancing. ---

Protocols Capitalizing on Cheaper Gas

So how are major protocols handling these new gas dynamics? Upgrades collectively unlock ~$5B+ in untapped liquidity by lowering barriers for niche trading pairs like RWAs and synthetics. Uniswap, Balancer, and Curve are rushing to supply liquidity for tokenized RWA swaps. Lending giants like Aave, Compound, and Morpho are supplying even more liquidity for new markets such as DATs, DePIN, and RWAs. Because it’s easier and cheaper to source liquidity, Perp DEXs are now offering up to 100× leveraged products for traders. ---

L2 Growth After Fusaka

Layer 2s are already seeing measurable effects. Arbitrum saw 15% TVL growth from optimized dApps. Base is focusing on on-chain tipping and fan tokens, while Optimism introduced cross-rollup markets for interoperable liquidity pools. ---

What About ZK?

Now, ZK is where Fusaka could potentially affect Ethereum the most. That said, it’s still early days. ZK remains largely theoretical, and we don’t yet know whether the cost of running ZK proofs is truly optimal at scale. ZK proofs are expensive because they add an extra layer of cryptography to transactions—so cheaper gas fees are a welcome change. ZK DeFi has already seen a 25% increase in TVL inflows, unlocking privacy markets worth \$1.5B+ in tokenized assets and synthetics. Most of this growth is driven by two protocols: Linea, which is pushing ZK-secured RWA tokenization for institutions. zkSync Era, which is bringing liquidity from Ethereum onto permissioned institutional ZK chains. The rest of the ZK ecosystem is still playing catch-up in terms of innovation, but the potential is clear. ZK DeFi could be the unlock for deeper institutional adoption, allowing illiquid assets to become liquid and productive on-chain. ---

Final Thoughts

Following the Fusaka upgrade, sentiment across the ecosystem has generally been positive. But the elephant in the room remains: is this the endgame for Ethereum scaling? The answer is not yet. Fusaka is one step forward in frontier technology, and every step forward leads to experimentation. Ethereum continues to cement its L1 supremacy, with PeerDAS unlocking sub-cent fees at scale. While Ethereum’s price action has been boring, the network has been compounding on fundamentals, making it a strong long-term hold. That’s it for this episode of Whitepaper, and I’ll see you at the next reading.