Bitwise Scales Back Revenue Forecast for Ethereum’s Fusaka Upgrade, Citing Limited Impact on Blob‑Fee Income
The crypto‑asset manager’s latest research finds that while the December‑2024 Fusaka upgrade improves user experience and Layer‑2 economics, it falls short of the “5‑10×” revenue boost previously touted by Bitwise’s CIO.
Background
In November 2024, Bitwise chief investment officer Matt Hougan posted on X that the forthcoming Fusaka upgrade could be a “under‑appreciated catalyst,” potentially multiplying Ethereum’s revenue capture by up to ten times. The view was based on the expectation that a new minimum fee for “blob” data—large chunks of calldata that Layer‑2 (L2) solutions post to Ethereum’s base layer—would raise on‑chain fee income.
The upgrade went live in December 2024, introducing a floor price for blob submissions. The floor was designed to curb the volatile fee swings that had previously seen blob costs dip to near‑zero before spiking sharply during periods of network congestion.
What the New Bitwise Report Shows
A research note released on Jan. 28, 2025 and authored by senior research associate Max Shannon presents a starkly different outlook. The key findings are:
| Finding | Explanation |
|---|---|
| Blob‑fee floor raises nominal fees | Introducing a minimum fee does lift the average price paid for blob data. |
| Throughput growth offsets the fee floor | Ethereum’s post‑upgrade transaction throughput has risen sharply, diluting the revenue effect of the higher base fee. |
| Projected 12‑month contribution is marginal | The team forecasts that blob fees will add only a negligible amount to Ethereum’s total revenue over the next year. |
| Primary benefit is UX, not revenue | The upgrade stabilises costs for L2 operators, improving margins and end‑user experience rather than generating significant on‑chain earnings. |
Shannon emphasizes that revenue from blob fees was always a “multi‑input” problem: any increase in fees can be outweighed by higher network activity that spreads the fee base across more transactions. So far, the throughput gains have clearly dominated.
Current Revenue Landscape
Ethereum’s on‑chain revenue has been on a prolonged downtrend since its all‑time high of roughly $1.6 billion in November 2021. DefiLlama data indicate that by December 2025 the network was earning about $1.8 million per month—a decline of more than 99 %. January 2025 showed a modest uptick, edging past $2 million, but the figures remain a fraction of the pre‑rollup era.
Broader Implications
- Investor Expectations Reset – Bitwise’s revised stance illustrates how quickly bullish projections can be tempered by emerging data, a reminder for funds that heavily weigh protocol upgrades in their models.
- Layer‑2 Economics – Although Fusaka’s fee floor does not materially boost Ethereum’s treasury, it does improve the economics for L2s that rely on cheap, predictable blob pricing. This could sustain or even accelerate L2 adoption, indirectly supporting the ecosystem.
- Security Concerns – Independent researcher Andrey Sergeenkov recently highlighted that the lower, more stable blob fees may inadvertently facilitate “address‑poisoning” scams, where malicious actors exploit cheap data posting to profit from fraudulent contracts. Regulators and developers may need to consider additional safeguards.
- Long‑Term Revenue Prospects – Shannon notes that the fee floor could start capturing a share of L2‑generated value over a longer horizon, but any material impact is likely years away, especially if Ethereum’s scaling roadmap continues to push throughput upward.
Key Takeaways
- Fusaka improves user experience by stabilising blob fees, helping L2s maintain predictable cost structures.
- Revenue impact is minimal: projected blob‑fee income will barely dent Ethereum’s overall on‑chain revenue in the next twelve months.
- Bitwise revises its outlook, moving away from the earlier “5‑10×” revenue surge narrative.
- Ethereum’s revenue remains low—just over $2 million per month—despite the upgrade, underscoring broader macro‑economic pressures on the network’s fee market.
- Potential security side‑effects may arise from the cheaper, steadier blob pricing, prompting the need for vigilance from the community and security researchers.
Overall, Fusaka appears to be a step forward for Ethereum’s usability and L2 viability, but it does not deliver the revenue windfall that some industry insiders had hoped for. Investors and ecosystem participants will need to look beyond short‑term fee gains when evaluating Ethereum’s long‑term financial health.
Source: https://thedefiant.io/news/blockchains/fusaka-falls-short-on-ethereum-revenue-expectations-bitwise
