Verkle trees explained
Verkle Trees are cutting edge cryptographic data structures that combine “vector commitments” and “Merkle Trees”. They are designed to create smaller and more efficient proofs for verifying the Ethereum state. Verkle trees are a critical step towards “stateless Ethereum clients.” Currently, to run an Ethereum node data must be stored in a large amount of state data. With Verkle, there is no need for nodes to store entire state databases. Instead, they verify blocks using tiny witnesses which are cryptographic proofs that confirm data without requiring the full dataset. This dramatically reduces witness sizes from approximately 150 KB to just 1-2 KB per proof.
This innovation lowers the hardware requirements and entry barriers for running an Ethereum node. It empowers more individuals to operate full nodes, thereby increasing the network’s decentralization and security. This ensures that Ethereum remains robust and censorship resistant.
Why this is very important for AI driven apps
The Fusaka upgrade is especially important to AI apps for several reasons. For one, AI apps are data heavy containing embeddings, vector indices, model checkpoints, telemetry and inference logs. All these can be very bandwidth and storage intensive. With the Fusaka upgrade, it becomes easier and many times cheaper to put large data or proofs/commitments on L2s when L1 blob space and DAS scale. PeerDAS is a direct successor to EIP-4844 Proto-Danksharding which introduced blobs in the Dencun upgrade of March 2024. Proto Dankcharding made L2 transactions cheaper by introducing a new temporary data type for roll ups. PeerDAS implements the full DAS mechanisms needed to securely scale blob capacity further. This paves way for full Danksharding.
Fusaka upgrade also brings concrete mechanisms by providing cheaper blob capacity and PeerDAS. This lowers per byte data availability fees which are passed to rollups. Rollups can then offer sub-cent writes for bulk data for example embedding writes or model checkpoints. This makes hybrid onchain/offchain AI workflows economically viable.
The Fusaka upgrades also brings Verkle effects as much smaller state proofs makes it feasible to run secure light clients on phones and edge devices. So, this means AI dApps can verify date/state locally without heavy infra which improves UX and decentralization.
AI driven decentralized applications often require significant data storage and complex computations which traditionally incurred high costs on Ethereum. By drastically reducing L2 transaction fees via PeerDAS and making data verification more efficient with Verkle Trees, the Fusaka upgrade directly lowers operational costs for AI applications.
Impact on DEXs vs CEXs
This upgrade would fuel growth in decentralized exchanges as Fusaka brings much lower settlement/data costs on rollups and also higher L1 throughput. Also, composability which includes atomic onchain settlement and permissionless liquidity composability, reduces the cost and latency penalty that historically favoured centralized matching. This can help in attracting spot traders and onchain liquidity providers as gas fees become sub-cent.
There is no doubt that the very cheap fees, improved data availability and faster transactions as well as enhanced node accessibility introduced by the Fusaka upgrade will make using DEXs on Ethereum and L”s more attractive than ever. This closing gap in user experience and cost effectiveness with CEXs is expected to accelerate the shift in trading volume, potentially leading to DEX volumes surpassing CEXs for the first time on a sustained basis.
On the other hand, custody and fiat rails, derivatives, KYC, regulatory settlements, off chain matching speed and deep liquidity concentration on few CEXs are structural advantages that gas or cost improvements alone cannot erase. For a genuine flip of CEXs, DEXs need trading volumes, good UX, fiat rails, custody solutions and regulatory clarity in addition to the lower on-chain costs. This can only happen in the long term, not short term.
Final thoughts and conclusion
It is important for Ethereum users to know that the Fusaka upgrade is not just a technical update, it's a strategic move that significantly enhances Ethereum’s capabilities for mass adoption. By making the network faster, cheaper and more decentralized, Fusaka solidifies Ethereum’s position as the foundation layer for the next generation of web 3 applications including AI driven dApps and a thriving on chain financial ecosystem. Future updates like the Glamsterdam targeted for 2026 will continue to build on these improvements.
