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A recent investigative report from Kulpa Research has sparked significant debate regarding the health of the Ethereum network following the implementation of the Fusaka upgrade in late 2025. The report challenges the bullish narrative championed by major institutional holders, arguing that the network's recent surge in activity is primarily driven by malicious "address poisoning" rather than genuine economic growth, potentially destabilizing Ethereum's tokenomics.
Key Points
- The Fusaka upgrade increased Ethereum's gas limit from 30 million to 60 million units, leading to a 90% drop in transaction fees.
- Researchers estimate that 95% of the increase in active wallets following the upgrade is linked to "dusting" or address poisoning scams.
- Poisoning transactions now account for over 22% of all Ethereum network activity, up from 9.5% prior to the upgrade.
- The decline in transaction fees has weakened the network's fee-burn mechanism, lowering staking yields and threatening the asset's deflationary status.
The Impact of the Fusaka Upgrade
The Fusaka upgrade was designed to enhance Ethereum's scalability by increasing the gas limit, a move supported by the Pump the Gas (PTG) collective and validated by Ethereum co-founder Vitalik Buterin. While the primary goal was to improve network efficiency, the Kulpa Research report suggests that the resulting collapse in transaction fees has had unintended, deleterious effects on the ecosystem.
The report contends that the reduction in fees has made "address poisoning"—a scam where attackers send tiny, worthless amounts of crypto to mimic legitimate addresses—economically viable on the Ethereum mainnet. By lowering the cost of these spam transactions to approximately 3 cents, the upgrade has reportedly incentivized a flood of malicious activity. Carnegie Mellon University researchers cited in the report noted that over $50 million was lost to such attacks between December 2025 and January 2026 alone.
"Our analysis found that since Fusaka across both ETH and major ETH stable coins, 95% of the increase in active wallets were those created explicitly for dusting or address poisoning attacks," the report states.
Tokenomics and Institutional Concerns
The degradation of Ethereum's fee-burn mechanism poses a structural threat to the network's economic model. Traditionally, Ethereum's burn mechanism creates scarcity by removing ETH from circulation. However, the surge in "spam" transactions means that larger, legitimate transfers no longer compete for block space with high priority fees, leading to lower tips for validators.
This environment has triggered concerns among institutional investors. If block space expands without a corresponding increase in legitimate demand, validators face compressed margins, which in turn reduces the attractiveness of staking. The report notes that Bitmine, a leading Ethereum treasury company, may be over-reliant on current staking models despite a shifting interest rate environment where traditional US Treasuries currently offer more competitive and stable yields.
Future Outlook and Challenges
Despite the critical findings, Ethereum maintains a dominant position in the industry, hosting approximately 57% of all tokenized real-world assets (RWA). The network remains the primary settlement layer for major stablecoins and retains a reputation for security that many competing chains have yet to match.
The path forward remains complex. The upcoming Glamsterdam upgrade, scheduled for the first half of 2026, aims to further address censorship resistance and transaction execution efficiency by doubling the gas limit once again to 200 million units. Observers remain divided on whether this will exacerbate the spam issue or provide the necessary throughput for the next wave of decentralized applications. As the industry monitors these technical shifts, the burden remains on Ethereum developers to implement robust solutions against transaction poisoning while preserving the network's long-term economic sustainability.
