What to Know:
- Institutions now hold $135B in ETH treasuries, with staking dominance raising dilution risks for non-stakers.
- VanEck registers Lido stETH ETF Trust, eyeing SEC approval to bring regulated staking exposure to U.S. investors.
- Ethereum’s Fusaka upgrade in December aims to cut L2 costs, boost blob efficiency, and ease validator load.
Ethereum is at a pivotal moment. VanEck reported that Digital Asset Treasuries have grown to around $135 billion, a sign of how much institutions are stacking up and staking ETH. But this growing dominance carries risks, especially for regular ETH holders who don’t participate in staking. At the same time, Ethereum’s next big upgrade, Fusaka, is set to bring changes meant to ease network congestion, cut costs for Layer-2 chains, and boost efficiency.
Institutions Drive DAT Growth
VanEck’s report from September talks about a trend: more and more institutions are buying ETH and locking it up in their treasuries, which is a big part of the $135 billion in DATs. A lot of these organizations are staking their ETH to get rewards and show that they are committed to the network for the long term. VanEck recently registered the Lido Staked Ethereum (stETH) ETF Trust in Delaware. This shows that the company wants to package Ethereum staking exposure into a product that is regulated. If the SEC gives its approval, it would let U.S. investors access staking rewards through a familiar ETF format. This could speed up the adoption of staking by institutions.
But when large amounts of ETH are staked, less is left in circulation. That can “dilute” the influence or benefits of holders who don’t stake their share of rewards, and governance weight may shrink over time. VanEck warns that non-stakeholders could face dilution risk if institutional staking continues to rise.
VanEck also noted that in September, blockchain revenues dipped, particularly for Ethereum, which saw about a 6% drop. As markets quiet down, fee income from activity slows too, tightening pressure on the base layer’s economic model.
What Fusaka Brings to the Table
Ethereum’s Fusaka upgrade is scheduled for December and is meant to be one of the biggest scaling steps yet. The upgrade includes two key parts that everyone is watching closely: expanded blob capacity and probabilistic sampling.
Fusaka will increase how much data the chain can handle per block. This helps Layer-2 solutions by allowing them to submit more data at lower cost. Instead of every node downloading all data, nodes will sample parts of it and work together. This cuts down bandwidth and storage requirements, making Ethereum more efficient for validators. These changes intend to reduce the burden on nodes, lower fees for Layer-2 chains, and keep the network scalable as usage grows.
However, regular non-staking users may feel squeezed if rewards or influence keep shifting toward stakers. The upgrade is a chance for Ethereum to balance the network’s needs to scale on-chain and remain fair to all holders. Also, with staking expanding, the base layer needs new routes for fee income. Lowering Layer-2 costs is good for the ecosystem, but it also means the main chain has to find new ways to stay economically healthy.
What’s Next?
ETH has had a hard time staying above $4,500 lately. It has dropped back down to $4,200 after failing to stay above higher levels. Meanwhile, it looks like institutional interest is moving toward Bitcoin. Bitcoin spot ETFs just got $985 million in new money, which means that big money is moving back toward BTC, even though Ethereum is losing steam.
The big question is whether Ethereum can keep its security and performance in check while facing more and more institutional pressure. It’s a tightrope walk, and the network needs to change without leaving regular users behind. Institutions are driving the growth of staking and promising new technical help, so 2025 could be a key year for the long-term future of Ethereum.
