While traders are fixated on charts and the market's tepid response following the recent upgrade, significant changes are underway in Ethereum. This situation can be described as a "quiet evolution": despite the lackluster price movement, blockchain activity is on the rise.
On-chain metrics show a decline in fees and a record number of new addresses. Major players are increasing their positions in staking, ignoring market pessimism, while the network itself is operating more efficiently.
The next phases will be the hard forks Glamsterdam and Hegota, aimed at making Ethereum even more productive and reliable, while laying a solid foundation for future innovations.
This article analyzes the developers' plans and assesses the asset's prospects in light of the upcoming updates.
Boost After Fusaka
More than a month has passed since the major Fusaka upgrade, yet Ethereum's price remains significantly below its all-time high (ATH) reached in August.
As of January 11, 2026, the second-largest cryptocurrency is trading 36% lower than its ATH from last August. Source: CoinGecko.Despite the unimpressive dynamics, the hard fork introduced fundamental improvements to enhance the scalability, efficiency, and security of the second-largest cryptocurrency's network.
Specifically, EIP—7594 has paved the way for PeerDAS technology. This will allow validators to verify small fragments instead of entire BLOB objects, reducing the load on nodes and improving data accessibility.
Following the upgrade, the price of ETH briefly rose above $3200 (+3%), but in the following month, the quotes changed little.
Nevertheless, the deep changes in the system's operation have positively impacted on-chain activity, laying a solid foundation for future updates and the prospects of the second-largest cryptocurrency.
By the end of the year, the Ethereum network set a new record: over 2.2 million transactions processed in a single day.
Despite the increased load, the average fee is around $0.11.
The average transaction fee in Ethereum is gradually decreasing despite high on-chain activity. Source: Etherscan.The Fusaka upgrade increased the network's base throughput by 33%, raising the gas limit from 45 to 60 million per block. Previously, the Pectra upgrade optimized the validator infrastructure and improved staking flexibility.
Researchers at Glassnode recorded a twofold increase in the user retention rate within the Ethereum network.
The number of addresses that became active for the first time in a month surged from 4 million to 8 million. Experts attribute this to an influx of newcomers who continue to use the blockchain after their first transaction.
On January 15, the number of active addresses surpassed 1 million—double the figure from a year earlier (410,000).
Dynamics of active Ethereum addresses. Source: Etherscan.Technical efficiency is attracting capital: according to Artemis, Ethereum led the year in net inflows ($4.2 billion).
Ethereum added $4.2B to lead 2025 net flows pic.twitter.com/vIVaaYCPwG
— Artemis (@artemis) December 29, 2025
By the end of December, the queue for Ethereum staking exceeded that for withdrawals.
For the first time since July, the queue for locking funds in staking was longer than for withdrawing coins. Source: Validator Queue.The head of DeFi at the L1 network Monad, known as Abdul reminded that a similar shift in queues was observed in June. After that, Ethereum's price doubled, reaching an all-time high of $4946 by August.
Leading podcast host Dylan Grabowski linked the changes in queues to aggressive coin accumulation by treasury-like companies such as BitMine, followed by staking. By the end of December, the firm of the well-known Tom Lee had staked approximately $1 billion in Ethereum. Two weeks later, this figure reached $3.33 billion.
Tom Lee(@fundstrat)'s #Bitmine staked another 86,400 $ETH($266.3M) 5 hours ago.
— Lookonchain (@lookonchain) January 11, 2026
In total, #Bitmine has now staked 1,080,512 $ETH($3.33B).https://t.co/P684j5YQaG pic.twitter.com/TpEf32m6AF
Popularity Among Developers and RWA Boom
In the fourth quarter, the number of new smart contracts on Ethereum reached an all-time high of 8.7 million.
🚨 ON CHAIN RECORD
— BMNR Bullz (@BMNRBullz) December 29, 2025
Ethereum just hit an ALL TIME HIGH in developer activity.
🔥 8.7 MILLION smart contracts deployed in Q4 2025, the highest quarter ever.
🔹 This isn’t speculation, it’s builders shipping
🔹 More contracts = more apps, RWAs, stablecoins, and infra
🔹 Real… pic.twitter.com/eVzxqCU0Ou
Analyst BMNR Bullz linked this growth to the organic development of three areas: RWA, activity in the stablecoin segment, and improvements in the underlying infrastructure.
“Ethereum is quietly becoming a global settlement layer,” the expert emphasized.
The second-largest cryptocurrency maintains its lead in the tokenization segment. It accounts for $12.7 billion of the total value of this sector, which stands at $20.69 billion as of January 11.
Shares of various networks in the real-world asset tokenization segment. Source: RWA.Ethereum also ranks first in the stablecoin sector. The ecosystem's share of the total circulating stablecoin volume is $170 billion.
Shares of popular blockchains in the stablecoin segment. Source: RWA.On January 7, Ethereum developers conducted another BPO fork, raising the limit of BLOB objects in a block to 21. The target figure also increased from 10 to 14.
This update increased the maximum block capacity to 2688 KB, positively impacting the network's throughput. This is the second scaling since the activation of Fusaka; the previous parameter change occurred in December 2025.
Now the team will focus on the next hard fork—Glamsterdam. This is also part of the The Surge technical roadmap for Ethereum.
What is Glamsterdam?
The Glamsterdam upgrade combines two updates: Amsterdam for the execution layer and Gloas for the consensus layer. The activation of the hard fork is tentatively scheduled for the first half of 2026.
The developers' main goals are to minimize trust factors in block formation, prepare for parallel transaction processing, and optimize gas economics. These steps will allow Ethereum to scale effectively through rollups, without overloading nodes and maintaining decentralization.
Key technical changes include:
- Built-in role separation (EIP-7732). The central element of the upgrade is the implementation of the ePBS mechanism at the protocol level. Currently, the separation of roles between initiator and block creator operates through external overlays, which creates centralization risks. The new algorithm will require builders to conceal block contents until they are confirmed. This will prevent validators from censoring transactions or profiting from altering their order (MEV).
- Access lists (EIP-7928). The Block-level Access Lists technology will allow specifying in advance the data needed for block processing. This will speed up transaction execution and make fees more predictable.
- New gas model (EIP-7904). The cost of operations will be proportional to actual CPU and memory resource consumption. This will eliminate the possibility of cheap execution of "heavy" computations and protect the network from DoS attacks. Maintaining bulky smart contracts will become more expensive, reducing the load on validator hardware.
Advantages of the updated architecture include:
- Decentralization. The implementation of ePBS at the protocol level reduces dependence on centralized relays, making the network censorship-resistant;
- Stability of the EVM. Optimizing gas and data storage costs ensures more predictable execution of smart contracts;
- Efficiency. Block-level access lists allow for parallel verification, speeding up network state handling under high load;
- Control of blockchain bloat. The new gas pricing model more accurately reflects actual resource costs, preventing excessive data growth (state bloat) in the long term;
- Support for L2. Optimizing block processing helps the main network handle the growing data flow from rollups, simplifying the publication of transaction packages and proofs for layer two solutions;
- Validator reliability. Reducing dependence on external MEV infrastructure lowers operational risks for network participants.
Potential Pitfalls
The Glamsterdam architecture revises block handling models, which carries specific risks:
- ePBS and MEV risks. Implementing role separation could lead to situations where builder failures impact validator revenues. There are also concerns that the block creation market could be monopolized by large players, threatening decentralization;
- Technical complexity. The new consensus rules and BALs require strict client synchronization. Errors in this layer could lead to network splits or vulnerabilities to DoS attacks;
- Compatibility issues. Changes in the gas calculation model could "break" the economics of dapps. Developers will need to adapt to new data storage prices and opcodes;
- Operational challenges. Validators will find it harder to manage infrastructure due to the abandonment of intermediaries, and the update carries systemic risks due to the simultaneous implementation of multiple fundamental changes.
How Will Glamsterdam Affect Ethereum's Price?
Hard forks are traditionally accompanied by high volatility. Statistics show that in the 60 days leading up to an upgrade, Ethereum often outperforms Bitcoin, making the "buy on rumors" strategy effective.
For instance, before The Merge in 2022, Ethereum's price rose by 100% from a local low, but after the upgrade, it corrected by 15%. The Shapella upgrade in 2023 led to a 10% price increase, despite fears of mass withdrawals from staking.
Analysts believe Glamsterdam could replicate the scenario of Dencun, where the asset rose by 60% ahead of the hard fork. This indicates a potential accumulation phase at the beginning of 2026.
Moreover, fundamental improvements such as enhanced censorship resistance could foster a steady influx of institutional capital in the medium to long term.
Weekly ETH/USDT chart on Binance. Source: TradingView.What Do We Know About Hegota?
Ethereum developers have transitioned to a regular update schedule—twice a year. This allows for gradual implementation of changes, avoiding risks associated with infrequent and large-scale protocol overhauls.
If the network expects the Glamsterdam upgrade in the first half of the year, then in the second half, it will be Hegota. The name combines the city of Bogotá (the venue for the Devcon conference) and the star Heze.
The final list of improvement proposals (EIP) will not be approved until February. The main candidate is the implementation of Verkle trees—a new data structure intended to replace the current Merkle trees.
Mechanisms for history pruning and execution level optimization are also under discussion. If some functions of Glamsterdam prove too complex to implement on time, they will be postponed to Hegota.
The State Bloat Problem
As the number of users grows and the gas limit increases, the volume of data in the Ethereum blockchain is rapidly expanding. This phenomenon is referred to as state bloat.
The protocol's state is the complete array of information about accounts and smart contracts that node operators must store to verify blocks and transactions. The Ethereum Foundation (EF) warns: the more data there is, the more expensive and complicated it becomes to run a full node. This leads to centralization, as ordinary users are pushed out of the market, making way for large providers.
Growth of Ethereum's state size. Source: EF.The main consequences of state growth include:
- Load on validators—they must constantly increase disk space to store information;
- RPC provider costs. Services are forced to maintain access to a complete archive of data, raising their operational costs;
- Synchronization issues. Due to the increasing data volume, loading state onto new devices slows down and becomes unstable.
Solutions
Ethereum's long-term strategy envisions a transition to a statelessness concept. This will allow validators to verify blocks without needing to store the entire blockchain history. This will increase throughput but shift the data storage burden to a narrow group of specialized providers.
To find a balance, the EF team is considering three approaches:
- State Expiry. This mechanism proposes deleting inactive data. Research shows that about 80% of the state has not been used for over a year, yet nodes continue to store it. Developers propose introducing an "expiration date": old information will be archived, and if necessary, it can be restored using cryptographic proofs.
- State Archive. This involves separating data into "hot" (current and quickly accessible) and "cold" (historical, stored separately).
- Partial Statelessness. Nodes will store only fragments of the state, while the responsibility for caching necessary data will shift to wallets and light clients. This will reduce hardware requirements and lessen dependence on large RPC services.
From Scaling to Optimization
In December, Ethereum co-founder Vitalik Buterin acknowledged that the complexity of the ecosystem hinders its mass adoption.
Although technically decentralized, the blockchain's architecture is still not user-friendly (or intuitive) enough for the average user. This creates a paradox: in practice, people are forced to trust a narrow group of developers rather than open code. Discussing the choice between functionality and simplicity, Buterin emphasized the need to "consciously forgo some capabilities".
Focus on Simplification
According to the roadmap, Ethereum's ultimate goal is to make interaction with the network as intuitive as using regular web applications. To achieve this, a comprehensive approach is being implemented:
- Smart wallets. The introduction of smart contract-based accounts will hide technical details like key management and gas payments from users;
- Light nodes. In the future, it will be possible to run a node on a smartphone or through a browser extension. This will lower the entry threshold and allow more people to participate in supporting the network.
Development Priorities
Buterin compared Ethereum to a hybrid of BitTorrent scalability and Linux openness. He believes that the current focus should not be on transaction confirmation speed but on increasing throughput.
According to him, this task can be addressed through technologies like PeerDAS and ZK proofs. With their help, blockchain throughput can be safely increased thousands of times while maintaining decentralization.
Has the Scalability Trilemma Been Solved?
At the beginning of 2026, Buterin expressed confidence that Ethereum is successfully overcoming the blockchain trilemma thanks to the development of zkEVM and the launch of PeerDAS.
According to his forecast, new types of nodes will emerge soon, and gas limits will be increased. It is expected that between 2027 and 2030, zkEVM technology will become the main validation standard. The long-term goal remains the transition to distributed block generation, which will reduce centralization risks and ensure equal conditions for participants from any region.
This direction is supported by Ethereum Foundation researcher Xiao-Wei Wang. She emphasized that integrating ZK proofs into the first layer of the network (L1) is not just a theoretical concept but part of an approved mid-term roadmap backed by recent technical breakthroughs.
Gloomy Forecasts and Reasons for Optimism
Bank of Italy economist Claudia Biancotti described a hypothetical scenario of a complete market collapse of Ethereum's value. In her assessment, this would lead to a collapse of the settlement mechanism and block assets worth over $800 billion.
The main vulnerability of decentralized networks, the author argues, is the direct dependence of infrastructure functionality on the price of the native token.
Collapse Mechanics
Blockchains operate thanks to validators who receive rewards in cryptocurrency. If ETH loses value, the economic incentives to support the network disappear. This triggers a chain reaction, turning market risk into infrastructure risk:
- Validators will begin shutting down equipment to avoid losses;
- The speed of transaction confirmations will slow down, and then the network will stop completely;
- A decrease in token value will collapse the "security budget," making 51% attacks cheap and accessible to malicious actors.
The greatest impact will be on tokens issued on top of the main blockchain. Even fully backed stablecoins (USDT, USDC) or tokenized securities will become virtually worthless. Assets will remain on addresses, but transferring them will be impossible as the underlying infrastructure will stop responding to requests.
Counterarguments: Institutions and Staking
Despite theoretical risks, current market dynamics suggest otherwise. Researchers at Wintermute note a concentration of liquidity in "blue chips," including Ethereum. The activity of institutional investors has changed the structure of capital flows, moving the market away from previous cyclical models.
The high trust in the asset is evidenced by the record volume of coins in staking—around 30% of the total market supply is now locked. Major players and issuers of exchange products are driving this growth:
- BitMine: The firm led by Tom Lee holds 4.07 million ETH (3.36% of the issuance), earning passive income on nearly half of this volume;
- ETF: Grayscale began distributing staking rewards among clients. Morgan Stanley filed for a spot Ethereum fund with a coin-locking option.
Many analysts note improved market sentiment and positive signals in the context of technical and fundamental analysis.
“Strong on-chain metrics, a steady influx of funds into ETFs, and optimism among ecosystem participants create conditions for breaking through current resistance levels,” said Nick Rak, director of LVRG Research.
In his view, the asset's position is strengthened by liquidity scarcity driven by high demand from major players. Additional support comes from updates that enhance network scalability and reduce fees.
***
Ethereum is at an interesting point in its development. Although prices have not yet fully reflected technological progress, fundamentally, the network has outgrown the stage of being a mere speculative instrument. Lower fees and high developer activity are transforming the blockchain into a global settlement layer.
The shift in focus from retail hype to institutional pragmatism is confirmed by the figures: record staking volumes and interest from giants like Morgan Stanley create a buffer that is hard to ignore. Capital is betting on the long-term security of the protocol, viewing it as the foundational infrastructure of the future.
Glamsterdam and Hegota lie ahead for the ecosystem—phases where the race for speed will give way to optimization and simplification of the system. Vitalik Buterin's course towards "simplifying" the protocol hints at the technology's maturation: it aims to become seamless for users while maintaining decentralization "under the hood".
The foundation for the next growth cycle has already been laid; the only question is when the market will recognize this evolution.