Fusaka’s upgrade to Ethereum, expected to go live in early December, promises to bring the world’s second-most valuable blockchain into an era of institutional-grade adoption. For too long, Ethereum has been too slow and too expensive to attract significant business on Wall Street. That could change as Fusaka implements major improvements to how the network authenticates and compresses data, increasing its speed and its capacity by 10-fold.
However it will not be easy for Ethereum Keep its lead Among the developers as the preferred chain to build; Continued evolution is essential for Ethereum to maintain its prevailing edge as a platform for on-chain finance.
Ethereum remains the preferred platform among institutions for asset tokenization, defi apps and StableCoin creation, based on strengths derived from its maturity. However, it faces threats that will erode its edge if it does not move to meet the market: like a shark, if Ethereum stops moving, it will die.
Strength: Ethereum Uptime
Solana hasn’t completely eclipsed Ethereum, however. A major reason for that may be that in the last five years, Solana, as a blockchain system, has gone dark Seven times. Ethereum, as Chief Investment Officer of Fundstart Capital, Thomas Lee said in Augusthas never crashed in its 10-year existence. Timeliness is valued by financial institutions; It’s not sexy, but it’s one of the key features that make on-chain infrastructure attractive to market participants.
Strength: The maturity of the Ethereum ecosystem
Another unsexy quality institutions will demand: availability and maturity of tooling and developer talent. While Solana Attracted the newest developers of any chain last year, solid Ethereum has the largest developer community, by a wide margin, a lead recently confirmed in A16Z’s State of Crypto Report.
Risk: Ethereum scaling
An ongoing issue that plagues Ethereum is the speed at which it is scaling, which is to say, kind of glacial. Fusaka will be a major upgrade, but it still won’t bring Ethereum and its rollup layers to the same transactions per second as Solana. In a world where a new GPT seems to appear every month, Ethereum has long exceeded its goal, which is stated by Inventor Vitalik Buterin in 2017. In contrast, Ethereum’s Layer-2 (L2) blockchains can process between 1,000 and 10,000 transactions per second.
Risk: Heavyweights and innovators break out of Ethereum settlement
New blockchains are increasingly supported by publicly traded companies, such as Arc from Circle and Stripe’s Tempo. Both arch and tempo are Layer-1 (L1) blockchains, like Ethereum. Instead of building a chain atop Ethereum as an L2 like the base of Coinbase, Circle and Stripe decided to build their own settlement layer, albeit compatible with Solidity’s programming language and Ethereum’s Virtual Machine.
Another L1 is hyperliquid, which is built as a decentralized exchange for perpetual futures trading. While this may seem niche, hyperliquid, along with perp dex aster, captured 32% of all blockchain revenue in September, according to a Vaneck’s assessmentknocked Solana from its perch. Just like Solana once came to steal Ethereum’s thunder, hyperliquid seems to be doing the same. And while the October 10 crypto flash crash shook hyperliquid and angered many of its traders when winning positions were used to fund losses, it nonetheless survived as designed. All this must be getting the attention of the Ethereum devs, huh?
Ethereum’s path to address the institutional market
There are many openings for chains like Solana and Hyperliquid to take advantage of Ethereum’s shortcomings. A real race for developer mindshare is underway as the choices of financially sound entrants like Circle and Stripe put pressure on Ethereum. Innovation has spread across multiple blockchain ecosystems, and liquidity follows suit, creating deep trading pools with innovative new protocols. Will Ethereum’s framework disappear?
To avoid that, there is a lot of education around Ethereum that needs to be done before it is fully embraced by key corporate executives and the general public. For financial institutions choosing their preferred platforms for tokenization, trading and yield, Ethereum’s human capital may be the final decider. Ethereum’s main contributors and ecosystem leaders have historically been an idealistic bunch, while also pulling off major upgrades like merge without hiccups, and now Fusaka is poised to take the network to the next level. For the health and future of the network, key contributors need to raise people who can guide multi-person relationships.
For now, at least, Ethereum is still on top of where the institutional crypto infrastructure is being built. It has been shown to be vulnerable to slow scaling speeds, the constant threat of upstart competitors, and always having Solana and others to keep it in check. If others respond to the institutional roadmap faster or better, Ethereum risks losing its edge, no matter how high the price of ETH.
