The rebirth of Ethereum: when the "identity problem" becomes a strategic opportunity

For all of 2025, Ethereum faced a deep narrative crisis. It was not “pure” enough like Bitcoin, nor fast enough like Solana. Amid competitive pressures and the post-Dencun revenue collapse (plummeted 75% year over year in August, remaining at just $39.2 million), the market wondered: Does Ethereum still have a defendable moat?

But what seemed like an announced death turned out to be the preamble to a structural transformation. Throughout 2025, three converging events completely rewrote the script: the regulatory recognition of ETH as a digital commodity, the technical update Fusaka on December 3, and the emergence of a new “Trustware” model that places Ethereum at the center of the on-chain economy.

The regulatory turning point: when regulation redefines identity

November 2025 marked a crucial turning point. U.S. SEC Chairman Paul Atkins introduced “Project Crypto,” abandoning years of “Regulation by Enforcement” in favor of a flexible classification based on the economic reality of assets.

The key breakthrough: the SEC formally recognized that Ethereum, with over 1.1 million validators and the most distributed node network in the world, no longer depends on centralized “Essential Managerial Effort.” Is ETH a security? No—it’s a digital commodity.

In July 2025, the “Digital Asset Market Clarity Act” (CLARITY Act) codified this distinction legally, assigning Bitcoin and Ethereum to the jurisdiction of the CFTC rather than the SEC. For the first time, banks can register as “digital commodity brokers” and offer custody and trading of ETH without the restrictions imposed on securities.

In bank balance sheets, Ethereum is no longer a “high-risk and undefined” asset, but a commodity like gold or oil. This reclassification is not cosmetic: it opens access to a completely different institutional liquidity.

The Dencun paradox: how a technological solution revealed an economic crisis

The Dencun update in March 2024 introduced EIP-4844, offering Layer 2 data space (Blob) almost for free. From a technical perspective, it was brilliant: gas fees on L2 collapsed from several dollars to a few cents, catalyzing ecosystem prosperity.

Economically, it was a disaster.

The Blob pricing mechanism was based on supply and demand. Since available space far exceeded initial demand, the Blob Base Fee dropped to 1 wei (0.000000001 Gwei). Result: L2 networks like Base charged users reasonable fees but paid Ethereum a negligible “rent”—sometimes just a few dollars while generating tens of thousands of dollars in volume.

As most transactions from the execution layer of L1 moved to L2, and the burn effect via Blob was insufficient, the EIP-1559 deflationary mechanism stalled. By Q3 2025, Ethereum’s annualized supply growth rate rose back to +0.22%, erasing the “deflationary asset” narrative.

The community called it the “parasitic” effect: L2 ate the meat, L1 ate the wind.

Fusaka: repairing the value capture chain

Faced with doubts about the sustainability of the business model, Ethereum’s developer community did not passively wait. The Fusaka update on December 3, 2025, represents the first structural attempt to “repair” the value flow between L1 and L2.

EIP-7918: the guaranteed minimum price

The key proposal from a commercial perspective is EIP-7918. It introduces a revolutionary mechanism: the Blob Base Fee cannot fall indefinitely. Instead, the minimum price of Blob is now linked to the gas price of the L1 execution layer (specifically 1/15,258 of the L1 Base Fee).

What does this mean? As long as the Ethereum mainnet remains busy—with new emissions, DeFi transactions, NFT minting—the L1 Gas Price will rise, automatically increasing the “floor price” for Blob space purchases by L2. They can no longer use Ethereum’s security almost for free.

The impact was immediate and dramatic: after activation, the Blob Base Fee increased by 15 million times, from 1 wei to 0.01-0.5 Gwei. For L2 users, the transaction cost remains low (about $0.01), but for the Ethereum protocol, it means a thousands-fold increase in revenue.

PeerDAS: expanding supply side

To prevent rising prices from stifling L2 development, Fusaka also introduces PeerDAS (Peer Data Availability Sampling). It allows nodes to randomly sample only a small part of Blob data instead of downloading the entire set, reducing bandwidth and storage pressure by about 85%.

This technical innovation enables Ethereum to drastically expand the total Blob supply. After the update, the target number of Blobs per block will gradually increase from 6 to 14 or more. By increasing price and volume simultaneously, Ethereum has built a “price and volume increase” sales model.

The new business model: “Trustware” and digital seigniorage

Post-Fusaka, Ethereum’s business model emerges with clear structural features:

Upstream: L2 networks (Base, Optimism, Arbitrum) act as “distributors,” capturing end users and managing high-frequency transactions.

Midstream: Ethereum L1 sells two core commodities:

• High-value execution space for L2 settlement proofs and complex DeFi transactions
• High-capacity data space (Blob) for L2 history storage

Downstream: Circular value flow—L2 rents (denominated in ETH) are largely burned, increasing scarcity for all holders. A small portion goes to validators as staking yield.

This architecture transforms Ethereum from a “world computer” to a “financial settlement system”—similar to SWIFT or FedWire, not Visa or Nasdaq.

Market demand is real. According to analysts, ETH burn rate on Ethereum in 2026 could increase by 8 times compared to current levels.

How to price the unpriceable: converging valuation models

With a clarified business model, the question arises: how to value this new hybrid asset?

DCF perspective (on technological action): In Q1 2025, 21Shares calculated ETH’s fair value at $3,998 with a conservative discount of 15.96%; with optimistic assumptions (11.02% discount), the fair value rises to $7,249. EIP-7918 provides a solid foundation for linear future income projection based on expected L2 growth.

Monetary premium (on commodity perspective): ETH is the main collateral of the DeFi ecosystem (TVL over $100 billion), the trust anchor for minting stablecoins, lending, and derivatives. With ETFs locking ETH ($27.6 billion as of Q3 2025) and corporate reserves growing, liquidity is tightening, granting a premium similar to gold.

The “Trustware” concept: ConsenSys introduced a revolutionary framework in 2025: Ethereum does not sell computing power but “decentralized and immutable finality.” With on-chain RWA, Ethereum L1 shifts from “processing transactions” to “protecting global assets.”

If the system protects $10 trillion of global assets by applying an annual “security tax” of 0.01%, Ethereum’s market cap must be sufficiently large to withstand a 51% attack. Ethereum’s market cap becomes directly proportional to the economic value it supports. No narrative is more convincing than this “security budget” logic.

The geopolitical feast of blockchains: where Ethereum sits

In 2025, the public chain market has structurally segmented:

Solana positions itself as Visa or Nasdaq—aiming for extreme TPS, low latency, ideal for high-frequency trading, payments, and consumer applications. It is the “retail” table.

Ethereum has evolved into a settlement system like SWIFT or FedWire. It does not process every coffee purchase but “settlement packets” from L2 containing thousands of transactions. It is the “wholesale” table.

High-value, low-frequency assets (tokenization of bonds, cross-border large-value settlement) prefer Ethereum for greater security and decentralization. Low-value, high-frequency transactions go on Solana. This is not competition but market differentiation.

In the RWA domain, considered the future trillion-dollar market, Ethereum shows dominant strength. Benchmark projects like BlackRock’s BUIDL and Franklin Templeton’s on-chain funds keep Ethereum as the preferred platform. For assets worth hundreds of millions or billions of dollars, security comes before speed.

Ethereum had lost its way in 2025, trapped in an identity crisis that seemed unsolvable. But in the final months of the year, it made a risky leap toward the “digital economy seigniorage” model, redefining not only its narrative but the very structure of the on-chain economy.

Will this leap of faith land on a haystack or on solid rock? Q1 2026 data will provide the answer.