The Ethereum Foundation launched a $2 million security audit contest for its Fusaka upgrade, targeting Q4 2025 mainnet deployment, aiming to bolster network security and efficiency amidst potential coordination delays.

Executive Summary

The Ethereum Foundation has initiated a $2 million security audit contest for its upcoming Fusaka upgrade, a critical initiative designed to bolster network security, throughput, and efficiency. Co-sponsored by Gnosis and Lido, the contest precedes a targeted Q4 2025 mainnet deployment, though officials acknowledge potential delays due to coordination challenges.

The Event in Detail

The Fusaka upgrade is positioned as a significant hard fork for the Ethereum network, combining elements from the "Fulu" (consensus layer) and "Osaka" (execution layer) upgrades. It represents the largest bundled hard fork since The Merge, incorporating approximately 12 Ethereum Improvement Proposals (EIPs) focused on enhancing scalability, security, and cost efficiency across both Layer 1 and Layer 2 networks.

Security Audit Contest Mechanics

The security audit contest, hosted on the Sherlock platform, is scheduled to run for four weeks, from September 15, 2025, to October 13, 2025. The initiative features a $2,000,000 reward pool, with contributions from Gnosis ($100,000) and Lido ($25,000). Prize distribution is tiered based on the severity of identified vulnerabilities: $50,000 for low-severity findings, $200,000 for medium, $500,000 for high, and the full $2,000,000 for critical issues. An additional $25,000 is reserved for informational findings, capped at $1,000 each. To incentivize early participation, a reward multiplier mechanism offers 2x payouts in the first week and 1.5x in the second week.

Key EIPs and Technical Innovations

Central to the Fusaka upgrade is EIP-7594 (PeerDAS), which introduces Data Availability Sampling (DAS). This mechanism allows network validators to verify data by downloading only a small fraction of blob data, significantly reducing bandwidth and storage requirements. This innovation is crucial for enabling the network to support 128 or more blobs per block, laying foundational groundwork for highly scalable Layer 2 solutions. Additionally, Verkle trees are set to streamline Ethereum's state and node structures, aiming to reduce data burden and enhance network decentralization.

EVM optimizations include EIP-7939 (CLZ Opcode), designed to accelerate cryptographic computations, and EIP-7951 for secp256r1 curve support, which will improve smart contract efficiency and facilitate interoperability with traditional Web2 security standards.

Further EIPs address critical network parameters: EIP-7935 proposes increasing the block gas limit from approximately 45 million to 150 million units, enabling a greater number of transactions per block. Conversely, EIP-7825 (Transaction Gas Limit Cap) sets a maximum limit of 30 million gas per single transaction to mitigate spam and bolster network resilience. Other proposals, such as EIP-7642, focus on streamlining node synchronization by removing outdated historical data, improving efficiency and reducing storage needs.

Market Implications

The successful deployment of the Fusaka upgrade is anticipated to significantly enhance Ethereum's capabilities. The proposed changes are expected to boost Layer 2 throughput to tens of thousands, and potentially hundreds of thousands, of transactions per second (TPS), which would vastly improve performance and cost structures for high-frequency use cases like decentralized finance (DeFi), social networks, and on-chain gaming. Projections suggest a potential 70% reduction in average gas fees with the planned gas limit increase.

The proactive security audit contest aims to identify and rectify vulnerabilities before mainnet deployment, thereby strengthening network stability and reliability. Long-term, a more scalable and secure Ethereum network is expected to drive broader adoption of Layer 2 solutions and could positively influence the valuation of ETH as the ecosystem becomes more robust and efficient.

Expert Commentary

Tomasz Stańczak, co-executive director at the Ethereum Foundation, has publicly addressed concerns regarding the Fusaka upgrade's scheduled deployment. He indicated that the upgrade, initially targeted for November 2025, might face delays due to existing coordination issues among various development teams, client teams, and infrastructure providers. Stańczak emphasized that ensuring a seamless and bug-free launch, even if it requires a postponement, is prioritized to prevent more significant issues that could compromise network integrity.

Broader Context

Fusaka is a critical milestone within Ethereum's "Surge" phase, following the Pectra upgrade, and serves as a foundational step for future network advancements, including the planned Glamsterdam upgrade in 2026. This upgrade encompasses some of the most significant structural changes to the Ethereum Virtual Machine (EVM) since its inception, aiming to solidify Ethereum's position as a competitive and robust platform in the broader Web3 ecosystem. While the inclusion of the EVM Object Format (EOF) remains under discussion, its potential integration is being considered for future upgrades like Glamsterdam.