Ethereum Fusaka Upgrade This Week!🔥BEAST MODE Coming 🚨Justin Drake ETH Foundation

Valuable upgrades to the Ethereum network will be rolled out on December 3, 2025, Fusaka mainnet upgrade. This specific mainnet upgrade aims to provide better dependability, swifter synchronization, and improvements to longstanding issues related to block and transaction processing.

~This episode is sponsored by iTrust Capital~
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Guest: Justin Drake researcher, Ethereum Foundation

00:00 intro
00:06 Sponsor: iTrust Capital
00:40 Fusaka Upgrade on Wednesday!
02:05 Most Important Upgrades in Fusaka
03:20 TPS for Payments
04:13 L1 vs L2 Transaction Speeds
05:06 Next Upgrade = Glamsterdam 
06:05 Scaling for mega institutions
07:32 zkEVM Beast Mode
09:11 Ethereum vs Solana TPS
09:56 Velocity vs Volume
11:35 China Attacking Bitcoin?
14:03 U.S. Military Defending Bitcoin?
14:20 Transactions on Bitcoin Decaying
16:18 Quantum Threat on Bitcoin
18:13 Decentralizing Layer-2's
19:41 Tom Lee vs Michael Saylor
21:46 Cardano bug split chain
22:15 $ETH Price after Fusaka Upgrade
23:20 outro

#Ethereum #Crypto #bitcoin
~Ethereum Fusaka Upgrade This Week!🔥BEAST MODE Coming 🚨Justin Drake ETH Foundation~
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Episode Transcript

Speaker 1 (00:00):
Let's dive into beast mode today.

Speaker 2 (00:01):
We're going to be looking at Ethereum and the Fusaka
upgrade that is pending. It's all going to be broken
down for you don't want to miss it. Let's get
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Speaker 1 (00:35):
Try it out.

Speaker 2 (00:35):
I think you guys might be intrigued with it. And
they've been a longtime sponsor of our channel supporting us. So,
as you guys know, Fusaka is on the UH. I
guess we'll call it on the beginning of a new era.
And what we're talking about here, of course, is the
next Ethereum upgrade. If you don't know what that means, well,
we thought let's bring in one of the experts out there,

(00:57):
and of course that is Justin Drake to break it
all down.

Speaker 1 (01:00):
Justin, welcome back into the show.

Speaker 3 (01:01):
Absolutely, thanks for having me.

Speaker 2 (01:03):
I was on your Twitter account and I love the
description here the bitcoin security researcher.

Speaker 1 (01:12):
That's a good one.

Speaker 2 (01:13):
I love you got to keep a little tongue in
cheek there, Justin, So this is a good one. Give
me a framework of where Fusaka is. Are we on
par for getting this done by December third? What are
the things we can expect?

Speaker 3 (01:26):
Yees, So, Fusaka is indeed scheduled for December third, and
there's several things that we can expect. The first one
is some scalability improvements, most notably for the l twos.
We will be increasing by more than a factor of
two the blob capacity. So that's the data availability through

(01:46):
an grade called peer DAS. The DAA stands for data
availability Sampling. It's some cryptographic magic in order to safely
scale the l twos. We also have a bunch of
EAPs to help scale d L one and just a
few days ago we actually increased the gas limit from
forty five million to sixty million.

Speaker 2 (02:06):
What would be the most important part of FUSAKA that
we really need to pay attention to both as eth
enthusiasts as crypto investors. What makes the most sense for this.

Speaker 3 (02:18):
So Fusaka is made out of nine EPs and EPs
and the Theoreum Improvement Proposal. Five of those are related
to scaling, and most notably Peodesk. That's probably the headliner.
We also have two other exciting airps. The first one
has to do with support for a new curve called

(02:38):
sec P two, five, six or one, and this is
technical mumbo jumbo for hardware wallets, so we'll have better
support for hardware wallets infhones, so it means a more
secure user experience. We also have another EAP, which is
also a technical called the Terministic Proposal look Ahead, but
that basically gives US infrastructure to build pre confirmations on

(03:03):
L one. So today, if you want to do an
L one transaction, you have to wait the twelve second slot.
We have pre confirmations coming hopefully soon.

Speaker 2 (03:11):
So that's even more speed when you look at this
kind of speed, this kind of throughput Now with FUSAKA,
and we'll talk about the next upgrade coming and what
that matters. But I'm kind of curious, how does this
apply to things like payment systems, whether this is credit card,
you could look at Visa, et cetera that have large throughputs.

Speaker 1 (03:31):
Does this enable the web three.

Speaker 2 (03:33):
The next Internet of Value kind of moving in that
direction to kind of go at these light speeds now through.

Speaker 3 (03:40):
For SOCCA, not yet unfortunately. So the fruit of that
we have right now is about two point five mega
gas per second and the average transaction is one hundred
thousand guests, so we're talking about twenty five transactions per second,
roughly speaking. And there's another issue with payments, which is
the twelve second slot is a bit too long from
a u X standpoint. So a lot of the payments

(04:02):
I expect to happen on the L twos, where they
can already support hundreds, if not thousands of transactions per second,
and they have much faster confirmation times on the order
of hundreds of millionseconds.

Speaker 2 (04:14):
So okay, so within that is building on L one's
practical I mean, with those kind of demands, I was
just looking at Italics tweet right here. Do you feel
like that's going to be the case or do you
feel like L two's are still going to have a
large contribution to what's happening on their theorem.

Speaker 3 (04:33):
Yeah, so my vision for the endgame, if you will,
is ten million transactions per second on all of the
L twos combined, and ten thousand transactions per second on
the L one. Now ten thousand transactions per second, there's
a good start for high value transactions. It's about zero
point one transaction per day per human. So if you're

(04:53):
doing a very high value transaction maybe once a week
or so, the L one is going to be the
place for that. We're already seeing the L one being
the center for defile liquidity for example, it's where all
of the loner origination on AVE.

Speaker 2 (05:07):
Has right, Glamsterdam is the next upgrade. What does Fusaka
not do that Glamsterdam will do?

Speaker 1 (05:15):
Can you give me some insights on this?

Speaker 3 (05:17):
So I think for the next few forks, we're going
to have a focus on increasing scalability, both for the
L two's and for d L one, So it's going
to be more of the same. GLAMs to them does
have one specific headliner called EPBS, which is a way
to remove some of the trust assumptions that we have
in the so called MeTV pipeline, So this is just

(05:39):
a technical term for the process of taking transactions and
forming blocks. Right now, there's a few centralized entities called relays.
The idea is to provide infrastructure so that in the
worst case, we don't have to rely so much on
these relays and also epbs. What it gives us is
so called pipelining, which basically buys us a bit more

(06:00):
time in order to process transactions, which in and of
itself should help with scalability of the l one as well.

Speaker 2 (06:07):
Is that going to open things up for the institutional
capital to take a look at ethereum, maybe in some
new ways.

Speaker 1 (06:15):
What would be your analysis of that.

Speaker 3 (06:18):
I think a large subset of applications need some form
of predictability as to what will happen in the future
so that they can start planning ahead for the next
few years. My hope is that we can set up
automatic gas limit increases at roughly three x per year.
There's a specific proposal from Dankrat which increases the gas

(06:41):
limit automatically over a period of four years, so that
would be three to the power four, which is roughly
one hundred x increase. That amount of predictability will allow
institutions who are not doing a crazy amount of fruit
but not payments, but other lower fruit put applications to

(07:02):
plan ahead.

Speaker 2 (07:03):
So that's going to open it up, I would think,
you know, when you look at like you mentioned, especially
on high value transactions. The key there, of course is
if we see mass adoption. So back to your point scalability,
you feel like, what's going to happen with Lampstrom is
that going to be required to see eth at scale,
especially with Wall Street coming into the market at the

(07:23):
pace in which they're coming in.

Speaker 3 (07:25):
So what I'm hoping can happen is that, in addition
to the incremental upgrades that we're doing every six months
now with hart Falks, we can start thinking of doing
more ambitious things in parallel. And there's this whole effort
that I'm involved with called zk EVMS or snockification of
DL one, and that is a whole new paradigm for

(07:47):
processing blockchains where you verify short mathematical or cryptographic proofs
of validity of the blocks as opposed to re executing transactions.
And this opens up orders of magnitude improvements, and you
can think of it in some sense as being a
parallel track to all core deevs ACD, which is what
does the incremental upgrades. Quite recently at depth Connect we

(08:12):
did this demo where we showed that real time proving,
meaning the ability to provide a proof at every single
block before the next block arrives, is something that can
be achieved at L one, and this will lay the
foundations for dramatically increasing the gas limit to what I

(08:32):
hope we can eventually reach, which is one giga gas
per second the ten thousand tps and I'm hopeful.

Speaker 2 (08:40):
I see, I'm looking at eth proofs here. Race to
prove theorem in real time? Is this similar to what
you're talking about right now?

Speaker 3 (08:47):
That's exactly it. You can see here you have proofs
arriving in real time for every single slot. The proofs
are being downloaded in your browser and verified locally. And
what you can what you should imagine is a very
weak device, for example a phone or laptop being able
to process every single film block even if the gas

(09:09):
limit is extremely large.

Speaker 2 (09:12):
So, based on this, would this be a threat to
Solana or even Suite of in terms of how they're
managing transactions versus what you're talking about now.

Speaker 3 (09:23):
Yeah, So Solana processes on average one thousand user transactions
per second. What I'm hoping we can do is ten
thousand transactions per second, so ten times Solana over a
period of six years, incrementally increasing three x per year.
But I think the real challenge with Solana is that
it's going to hit a bottleneck with its monolithic approach.

(09:47):
You can only process so many transactions on a single server.
You have to scale horizontally, and this is what blobs
and dataty sampling is all about.

Speaker 2 (09:56):
Yeah, for sure, what's more important right now in terms
of versus volume?

Speaker 1 (10:01):
What would you say.

Speaker 3 (10:02):
You mean in the context of stable coins.

Speaker 1 (10:04):
Yeah, stable coin velocity versus volume.

Speaker 3 (10:07):
I mean, I think both metrics are very important, but
one is easier to fake than the other. So if
you have free transactions, it's very easy to fake velocity.
On the other hand, total value locked is something that's
very very hard to fake. And here's a very striking statistic.
There's one hundred billion dollars of USDT so tever on Ethereum,

(10:29):
there's two billion dollars on Solana, So there's a fifty
x delta there, and that really shows that there's very
strong network effects on ethereum for stable coins and virtually
not for Solana.

Speaker 1 (10:44):
Why are we seeing this then?

Speaker 2 (10:46):
What the chart I'm showing you right here is just
the ability for Solana to outpace most of the rest
of the market in terms of stable coin movement right now?

Speaker 1 (10:56):
Is this what you're talking about?

Speaker 3 (10:58):
So I'm talking about total value locked, which.

Speaker 1 (11:01):
Yes, all right, versus transactions.

Speaker 3 (11:05):
Yes, transactions can be essentially faked. When you have free,
free transactions, you can take a million dollars and you
can just keep protecting them at infinitum, and that will
that will pump your numbers. And Solana has a history
of pumping numbers with.

Speaker 1 (11:19):
Which you're essentially that this is being faked right now.

Speaker 3 (11:23):
It could be. There have been cases over the years
where provably Solana was faking its numbers. I haven't looked
personally into the most recent ones, but I wouldn't be
surprised if those are indeed effect.

Speaker 2 (11:36):
All right, we got to talk about security also, the
scenario and attack vector that could be coming from China.
China is doubling down on crypto band now after some
new you know activity, They're probably going to continue to
go in after Bitcoin in the coming years. What is
your your assessment of this in terms of a nation
state starting to decide, hey, we're not going the route.

(11:59):
We've gone the rout of gold as our asset. Obviously
the United States has gone the rout of digital assets,
especially with the Genius Act in play. What would you say,
could could be a problem here?

Speaker 3 (12:10):
Yeah, So the fundamental problem is that when you zoom out,
bitcoin is not secure against the most powerful nation states.
And the reason is that the total budget to permanently
fifty one percent attack bitcoin is on the order of
ten billion dollars and on the order of ten gigawatts
of power. Now, if you look at China specifically, just

(12:31):
in twenty twenty four, they deployed two hundred gigawatts of
solar and so that's that's twenty x the amount of
power to attack bitcoin. And for them, ten billion dollars
is nothing. It's less than ten percent of their annual
defense budgets. Now, why would China be interested in attacking bitcoin? Well,

(12:55):
part of the reason is that they are structurally short bitcoin. Right,
They've prevented their popular from holding bitcoin, from trading it,
et cetera. And so the rest of the world stands
to gain relative to China, and so in some sense,
China has an incentive if Bitcoin were to become successful,
to go attack it.

Speaker 2 (13:14):
I see, okay, and I think that's the thing. You
got to look at the attack vectors. Obviously China has
gone the route of gold. This of course is one
of the contention issues that we're faced right now. But
with your attack vector thesis, you're looking at someone like
a black Rock. Most of Wall Street all investing in
terms of ETFs and Bitcoin. You've got strategy which is,

(13:36):
you know, doubling down and continuing to reposition now holding
i think three percent, on track for over the next
decade to possibly hold five percent of bitcoin. And that's
with some of the bitcoin scenarios that play out in
terms of people losing their keys. You know that would
never be achieved again. So it starts to reduce the amount.
Would that not position at least mostly the US in

(14:01):
a position of defense against what potentially could happen here
with China.

Speaker 3 (14:04):
Yeah, so you could imagine potentially the US government stepping
in with its military potentially to go defend bitcoin. But
in my opinion, that means that bitcoin has lost its neutrality.
It's no longer a credibly neutral global money. It's a
US money at that point right now. One of the
things that we've seen with you ETFs and Sailor and

(14:25):
the like is a dramatic decrease in transactions on the
bitcoin chain, which has led to a dramatic decrease in
transaction fees. So yesterday we saw two bitcoin of transaction fees,
which is definitely not enough to go secure bitcoin, and

(14:46):
the issuance is decaying exponentially. It's about two hundred times
larger than fees, so fees represent only half a percent
unless fees grow dramatically over the next ten years, I
don't see how bitcoin can secure itself with two bitcoin
per day.

Speaker 1 (15:03):
Yeah, well, that's on the current status. You know.

Speaker 2 (15:06):
Obviously I'm not arguing for or against. But if you
look at market demand right now, which has been I
would say moderate at best, because we haven't really seen
a market blowoff top and definitely not Wall Street jumping
and outside the ETFs, would market demand not increase that
capacity in terms of.

Speaker 3 (15:24):
Reput Yes, So the transaction fees are at a fifteen
year low. Now, what tends to happen, You're right, is
that during ball markets there's more interest and therefore transaction
fees go up. But you know, bitcoin needs to be
secure even in bad markets. And another observation is that
as the price of bitcoin increases, it's harder and harder

(15:46):
to generate BTC denominated fees. And so what I expect
what happened is actually the two bitcoin per day to
decrease over time if the price of bitcoin was to increase.
And one of the fee cs is that transaction fees
are going to replace issuance after every successive happening. But

(16:07):
what we're seeing is that the transaction fees are happening
faster than issuance, meaning that BTC transaction fees are decreasing
more than a factor of two every four years.

Speaker 2 (16:18):
Interesting, all right, Well you take that and you also
look at quantum, and I know many people would say,
I don't know if quantum is even Yes, a lot
of people would say yes, there are AI advancements that
we've seen, but now quantum potentially could be powerful enough
in a few years. Some people say this could happen
even faster with the acceleration of it.

Speaker 1 (16:37):
What do you think do you think this is a
risk right now?

Speaker 3 (16:40):
So my date is twenty thirty two for when we'll
have a cryptographically relevant quantum computer, basically a quantum computer
that can break our cryptography, so we have seven years
roughly to upgrade. I do think it's a threat, and
I think it's more of a threat to change that
can't upgrade easily. Example, Bitcoin Etheroreum has a whole R

(17:02):
and D process that has been in operation for several years.
I think where the number one in the market in
terms of potential solutions. I am a little bit worried
about bitcoin specifically because it's not just a technical problem,
it's also a social one. The reason is that a
very large fraction of the bitcoin keys have been lost,

(17:25):
and so if you take Satochi's coins, that represents about
five percent of the circulating supply. The community is in
the conundrum either they let quantum computer steal those one
million coins, in which case that's very problematic for a
global me or you know, they will burn Satochi's coins.

(17:47):
But that's also problematic because bitcoin is meant to represent
strong property rights.

Speaker 2 (17:51):
If it is capable, it would go after a lot
of these dormant wallets that are either untouched or incapacitated
right now, which could present a big issue because that's
a lot of bitcoiners kind of argue that is that
that's lost coin that will never be recovered unless we
were to see a true quantum cryptographic solution in play.

(18:13):
So interesting analysis there. Beyond that, I want to go
to a couple other points right now, This, of course
is in general when you kind of look at why
aren't we only seeing First of all, we only see
a couple of stage twos most of everything Stage one?
Why only stage two L twos in terms of decentralized
L twos?

Speaker 3 (18:32):
Right, So building a stage two L two is very
difficult because you're putting a lot of pressure on the
so called proof system. So either that's a proof game
in the case of optimistic roll ups, or it's a
snock in the case of a ZK roll up. If
there's bugs in these systems, which there are, then you know,

(18:53):
stage two roll ups are arguably more exposed from a
security standpoint then other roll ups Stage one and Stage
GERO that can lean more aggressively on their security councils.
Now we have this proposal called native ulups which addresses
the core of the problem, which is the bugs in

(19:13):
these proof systems, and it basically allows you to inherit
the same proof system as d L one, so you
have an exact copy of the EVM, and if the
L one is secure, then your L two will also
be secure and you won't need a security council to
intervene in case of a bug, and you also won't
need governance in order to stay in sync with the

(19:37):
L one every time the L one does a hart
fork which changes the EVM.

Speaker 1 (19:41):
Yeah.

Speaker 2 (19:42):
Yeah, I'm looking at the two champions of the markets
right now. When it comes to what most investors are
looking at. You look at Tom Lee, you know, I
would say he is pretty much the ethereum champion out there,
even though he's also a bitcoin I won't say he's
a bitcoin investor, but he also has made many calls
around bitcoin. Then you have Michael Saylor, who is just,

(20:04):
you know, always on bitcoin and never ending bitcoin. Which
one do you think does a better job in terms
of getting the masses educated on how to invest in
crypto in general?

Speaker 1 (20:16):
If you had a pick one, Yeah.

Speaker 3 (20:17):
I mean I would obviously pick Tom Lee. I think
the thing with Michael Saylor is that he is very
narrow minded in the sense that he's only looking at
one thing, which is bitcoin, and within bitcoin, he's only
talking about the good things. You never see him talking
about the security issue. You never really see him talking

(20:39):
about quantum. On the other hand, you know, Tom Lee,
as you said, he came first from bitcoin, that in
of itself shows some openness.

Speaker 1 (20:49):
Yeah, yeah, well I would agree with that.

Speaker 2 (20:51):
I think the fact that he has looked at, you know,
two variations of crypto has started to make his way
onto the theorym ecosystem, obviously with what he's doing with
BM and R.

Speaker 1 (21:02):
For sure.

Speaker 3 (21:02):
I've publicly challenged Michael Saylor several times to have an
open debate on bitcoin security. He has every time ignored me,
and so I'm hoping to use this show all right
again reiterate that I'd like to debate him on another
Chobe is, in my opinion, the number one issue in
the long term survival of them of bitcoin. That one.

Speaker 1 (21:24):
Okay, well, there you go.

Speaker 2 (21:25):
Another challenge coming in from the Theorem Foundation with Justin
Drake there, Michael Saylor.

Speaker 1 (21:29):
Hopefully if you're.

Speaker 2 (21:30):
Listening, we'll be happy to host that too, you know,
if you guys want to bring it on here or
co host it with another pro bitcoiner, you know, someone
like a Mark Moss. I mean, he's very friendly with
our network. There's several out there that I think would
easily jump at this, So that would be a possibility. Sailor,
if you're listening, hopefully you'll take us up on that. Hey,
justin I want to talk about you mentioned you're mentioning security,

(21:51):
and this is another thing that we continue to look
at other chains out there that claim to have large
amounts of security. One of them, because of most recent
is Cardono. Can you give me any insight to what's
happening over there?

Speaker 3 (22:05):
I don't follow Cardona like. All I know is that
they had a consensus bug recently which caused a chain split.
That's all I know.

Speaker 2 (22:14):
One other question before we get you out of here,
and that of course, the last time we saw an
upgrade Pectra, there was the kind of market move that
we experienced. Obviously, eth is now depressed slightly with based
on where we are in market condition. What's your anticipation
or do you have an anticipation of how it might
move based on Fusaka releasing this week.

Speaker 3 (22:35):
What I have found as a researcher over the last
eight years is that in the short term, my work
and various upgrades or various announcements have no significant impact
on the market. What gives me, solis I guess is
that over long periods of time, over five ten years,

(22:55):
we're trying to build something that's extremely meaningful. And my
thesis is that blockchains are winner take most, and that's
Eftherium is in a position to gobble up all the
incentive value.

Speaker 1 (23:06):
There you go.

Speaker 2 (23:06):
I like that one, winner take most. Justin has been
great having you back on to get an update on this.
As we start to see the great go and play
with Usaka and going into the next one being glamstered in,
We'll be watching your work very closely. So thanks for
coming in today. We appreciate it.

Speaker 3 (23:22):
Thank you.

Speaker 1 (23:23):
Pol.

Speaker 2 (23:23):
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