Ethereum's "DA Dawn": How Does the Fusaka Upgrade Make Celestia and Avail Seem "Redundant"?

In the crypto space, we have witnessed the rise and fall of countless grand visions.

Article Author, Source: MarsBit

Many teams have tried to carve out a share of Ethereum’s market, always with the same rationale: the base chain isn’t good enough—too expensive, too slow, not scalable, or too restrictive for developers. Recent examples include Plasma, which launched an independent stablecoin Layer-1 ((L1)), and Monad, which focuses on high-throughput EVM L1.

But over time, Ethereum has repeatedly disproven these accusations. The Merge upgrade demonstrated that Ethereum could indeed transition to Proof of Stake (PoS); the Dencun upgrade broke the narrative that Rollups (Layer-2 scaling solutions helping to offload the Ethereum network) would forever be unable to scale due to high costs.

Last Thursday, Ethereum officially launched the Fusaka upgrade, forcefully challenging the narrative that “Ethereum can’t meet the needs of high-throughput Rollups”—a premise upon which many modular blockchains base their existence.

Today, we’ll explore the essence of modular blockchains and the changes brought by the Fusaka upgrade.

At the end of 2023, a team with a deep understanding of distributed systems introduced the concept of “modular blockchains,” i.e., building a blockchain composed of three modular components: execution, settlement, and data availability (DA). That team was Celestia.

Celestia’s network was designed to provide one piece of the puzzle: data availability (DA). The core of DA lies in proving that data has been published to the network. Thus, whenever a chain produces a new block, nodes verify DA by downloading all the data.

Celestia’s idea is to make it easier for anyone to launch a blockchain by leveraging “puzzle pieces” from existing infrastructure companies. Projects can choose Arbitrum Orbit for execution, Ethereum for settlement, and perhaps Celestia, EigenDA, or Avail DA to meet their data availability needs.

Celestia’s initial bet was that Ethereum’s low throughput and high gas costs in 2023 made it unsuitable for rollups with high DA throughput requirements.

At the time, rollups on Ethereum operated with thin profit margins. Teams often kept only about 20% of the fees they generated, and in some cases, they paid more in settlement fees than they earned from users. The subsequent Dencun and Pectra upgrades changed this equation, lowering settlement costs and improving rollup operators’ economics.

The Dencun upgrade introduced a new space called Blobs for rollup data, replacing the previously used “calldata.” Blobs are about 95% cheaper than calldata. Dencun was the first step towards making rollups more affordable.

Next came Pectra. This upgrade increased the number of Blobs per block. If the first step was carving out a dedicated space for rollup data, the second was increasing its capacity. With Pectra, the goal was raised to 6 Blobs per block.

Rollups passed the saved costs on to users. As a result, L2 transaction costs dropped sharply, from 50 cents to about 3-4 cents.

Celestia’s vision was to separate data availability from execution, making scaling blockchains easy by reducing the load on the underlying L1. The future it hoped to see was: multiple rollups running atop a single DA layer.

While the vision of “multiple rollups” has come true, this market has been captured by Ethereum. These upgrades have greatly benefited Ethereum, which now provides DA solutions to over 55 rollups and secures over $40 billion in total value locked (TVL).

Meanwhile, DA layers are now struggling for adoption. In the past 24 hours, Celestia earned just $67 in daily fees, processing 1,600 Blobs; in contrast, Ethereum processed 41,000 Blobs.

@L2Beat

These numbers will soon look “child’s play.”

With Ethereum’s latest Fusaka upgrade, PeerDAS has been implemented on-chain—a new data sampling method that dramatically improves the efficiency of verifying data availability.

Each node checks tiny, random data fragments, and collectively the network ensures all data is present. Through sampling, Ethereum has increased its capacity from today’s target of about 6 Blobs per block to about 10-15 Blobs per block, and this mechanism allows for the gradual increase of Blobs per block in the future without requiring a hard fork. Blob capacity will double in a month and, over time, ramp up from 10 per block to 128. All of this happens without forcing home stakers (small validators) to upgrade their hardware.

The increased supply of block space lowers Blob prices and L2 operating costs, making it easier to maintain a profitable L2.

This reminds me of 2023, when DA chains like Avail and Celestia would publish comparison tables showing their throughput data outperforming Ethereum’s EIP-4844 Denarius upgrade. At that time, DA layer throughput data was indeed massive compared to Ethereum’s near future. However, with the Fusaka upgrade, Ethereum is expected to hit a cap of 128 Blobs per block, about 16MB/block—twice the current capacity offered by Celestia.

@Availproject

Fusaka marks a major milestone for Ethereum. The chain has successfully scaled its transaction capacity without squeezing out home stakers by raising hardware requirements, thus avoiding network centralization.

Fusaka is a celebration of Ethereum’s march toward a “rollup-centric” future. From L2 transaction prices catching up with other transactions in 2023 to today’s PeerDAS Blobs, the network has come a long way.

What’s surprising is that PeerDAS is just one of 13 EIPs (Ethereum Improvement Proposals) implemented in this historic upgrade. Besides PeerDAS, Fusaka includes an increase in the gas limit and introduces execution-cost-capped Blob base fees, ensuring Blob fees do not fall to zero. Thus, this may increase validator revenue per Blob.

Rollups now have a more predictable and scalable data layer, eliminating the fear of the network becoming overwhelmed during usage spikes. This stability gives teams room to focus on infrastructure upgrades: they can decentralize sequencers, experiment with lower-latency designs, and drive smoother user experiences without worrying that DA costs will suddenly turn against them.

However, it’s worth noting that after Fusaka, Blob capacity starts at 10 per block and is expected to double monthly via built-in network mechanisms. Whether these monthly increases can be rolled out smoothly will be the real test of PeerDAS in practice. The same goes for Blob pricing. While the new price floor strengthens validator incentives, its impact on the rollup user experience is not yet fully clear.

In the coming months, I’ll be watching for interesting second-order effects Fusaka may have on rollups and their user experience. Once I have updates, I’ll be back to share them.

Until then, enjoy this holiday season.