Ethereum in 2026: Upgrades, Scaling, and Investment Outlook

This year was a big one for the Ethereum (ETH +0.02%) community. The project integrated major upgrades, Pectra and Fusaka, which enhanced functionality and usability while laying the foundation for 2026’s planned Glamsterdam and Hegota updates.

Digital assets made significant inroads over the last 12 months, with Ethereum achieving several milestones. For example, the Pectra upgrade delivered major improvements to data availability and validator mechanics, while Fusaka laid important groundwork for future execution-layer and state management enhancements. Here is a deep dive into what 2026 will bring for Ethereum and how it will affect the average user.

Biannual Updates

These upgrades are part of Ethereum’s larger biannual upgrade schedule. Speaking on their effect on the network, Vitalik Buterin, Ethereum’s co-founder, explained how maintaining an upgrade schedule has helped to make changes more predictable for users, who are often left in the dark regarding upgrades on other networks.

Ethereum’s Core Goals for 2026

It’s a new year, but Ethereum has the same goals as last year. The network will focus attention on enhancing L1 scalability, decentralization, and efficiency. Additionally, it will integrate more censorship-resistant technology alongside scaling options and cryptographic targets such as 128-bit security for future zero-knowledge proof systems.

Support for DeFi and developers is another big 2026 focus point. Ethereum hosts the largest DeFi ecosystem in the world. Consequently, it’s seen by many as a vital component of the digitization of the economy. Recognizing their growing importance, Ethereum continues to pivot towards institutional-friendly features to entice these users.

What to Expect from ETH Going into 2026?

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There are two major upgrades planned for 2026. These upgrades seek to build consumer and institutional trust while limiting centralization concerns. Notably, much of the technology in these upgrades has been readily available to developers but isn’t enshrined in Ethereum’s coding just yet. Here are some of the most important upgrades planned for 2026.

Glamsterdam

The first upgrade planned for 2026 is called Glamsterdam. This performance upgrade is scheduled to go down in the first half of the year. It will focus on improving decentralization for block builders, reducing gas prices, and driving efficiency.

Source – Pintu

Enshrined Proposer-Builder Separation (ePBS)

At the core of this upgrade is the enshrining of the Proposer-Builder Separation (ePBS) protocol. This upgrade was introduced to the Ethereum community a few months ago via Flashbots MEV-boost. The MEV-Boost enables validators to participate in a block space auction.

To accomplish this task, the protocol decouples the validators from the network’s payload transaction builders. The validators then conduct an on-chain auction, receiving bids from builders. From here, one is selected to complete the task. Keenly, the selected builder must meet their strict schedule and deliver the payload, or they face reward slashing and penalties.

Altering MEV Extraction

This upgrade would reshuffle the back end, shifting MEV extraction from off-chain relays and placing it into on-chain auctions. This would help to reduce delays due to the relay-dependent structure and drive decentralization within the protocol currently.

Discussing the importance of the upgrade, Vitalik Buterin described his support for the upgrade and how it could be a vital way for Ethereum to combat centralization. He also touched on how it reduces risks from off-chain builders while optimizing the execution layer of the protocol.

How ePBS Works

The ePBS upgrade inscribes the already popular process into coding. The process will now follow very strict rules. The first step is that builders submit commitments and bids. The winning header is included in a second block and then sent to the Payload Timeliness Committee for verification and reveal.

The Payload Timeliness Committees are responsible for delivery enforcement. They are also tasked with preventing another major issue, free option attacks. This style of attack occurs when bidders make high bids but don’t meet their requirements. To prevent this occurrence, the upgrade introduces new reward slashing capabilities.

Glamsterdam Upgrade: Benefits

There are several pros that this upgrade brings to Ethereum’s network. For one, it boosts validator rewards. Specifically, they can secure higher bids without the need to run a builder. This structure is more censorship-resistant and boosts network MEV sharing to new levels.

Censorship Resistance

The entire process only takes 4-10 seconds, and it eliminates the need for the use of trusted relays or other additional steps that delay finality. Eliminating these relays also reduces attack vectors and censorship. The goal is to create a self-sufficient foundation that supports third parties but isn’t dependent on them.

Hardware Efficiency

The upgrade will also lower the hardware barriers for validators who can now outsource bundle optimizations. This strategy should get more builders on the chain due to the heightened MEV revenue. Additionally, the developers hope that this structure will enable diverse projects to outsource complex building tasks, reducing their overall workload and time invested.

Enhancing Decentralization

One of the most important benefits of the Glamsterdam upgrade is greater decentralization. In the past, Ethereum has faced some backlash for what some analysts saw as contentious centralization. By separating the block proposing options, it further enshrines decentralization into Ethereum’s core principles.

Glamsterdam Upgrade: Risks

The new setup does improve transparency and decentralization. However, there are some risks that it brings alongside its benefits. For one, the auction dynamics have yet to be seen in operation as a core component of the network. Additionally, some analysts believe the upgrade leaves the network open to multiparty collusion and chain stagnation.

Hegota

Following Glamsterdam’s successful integration, Hegota is the next big upgrade planned for the second half of 2026. This upgrade is set to help reduce state bloat. Specifically, it will integrate Verkle trees into the Ethereum code. Verkle trees act as an upgrade to the Merkle tree structure in that they reduce MPT limitations via the use of vector commitments.

Merkle trees store blockchain info in data trees. However, their structure was too large, creating bloat. Verkle trees address this problem via shallow trees and vector commitments.

Verkle Trees

To accomplish this task, Verkle trees store data in leaf nodes that are easier to access than in Merkle trees. The system uses intermediary nodes to verify proofs and vector commitments. This structure enables state verification without the need to hold the entire state of the network.

Stateless Clients

Stateless clients provide a major upgrade to the community. For one, they speed up transaction validations using less bandwidth. Additionally, they lower the hardware requirements for network nodes by reducing the need to store the entire network state.

Another major benefit is that they improve layer 2 support. Specifically, the improved state verification dramatically decreases L1 demands. Additionally, it boosts roll-up throughput. This improves L1 node count. In turn, this approach drives data availability, sampling speeds, and lowers L2 settlement costs.

Will ZK-proofs be Adopted in 2026?

While the upgrades made in 2025 set the foundation for ZK-proofs within the Ethereum ecosystem, it could be another year or more before the tech goes fully live on the mainnet. Both Pectra and Fusaka upgrades introduced optimizations like EIP-2537 for ZK support to Ethereum.

Notably, this year’s planned upgrades, like Glamsterdam, add other key components to the protocol, including support for proving time allowances. However, these upgrades are part of a slower phased integration of ZK rollups that could take until 2027 to complete.

Discussing the timeline, Ethereum developers have stated they want to achieve 10-second proofs and 128-bit security before integrating ZK proofs. This news isn’t a huge surprise as L2 solutions that offer features like Starknet continue to see growing adoption.

Pivot To Institutionalization

This year saw Ethereum make major strides towards institutionalization. The project received growing support following the approval of Ethereum ETFs and a strong push towards RWA tokenization. The latter is seen as a major step that will take key financial instruments like stocks and bonds and transfer them to the blockchain.

Regulatory Tailwinds for Ethereum in 2026

Another reason why Ethereum has taken a pro-institutionalized approach is recent regulatory clarity in the U.S., particularly around ETFs, stablecoins, and tokenized assets. This year saw the passing of several key pieces of legislation that helped to provide much-needed transparency to key aspects of the digital economy, including stablecoins, ETFs, and other popular investment vehicles.

Why Investors Are Positioning for Ethereum in 2026

Another interesting phenomenon that started this year but will certainly expand into next year is the emergence of Ethereum Treasuries. Companies like Bitmine Immersion Technologies (BMNR -2%) have made the pivot towards Ethereum versus Bitcoin (BTC -0.87%) with great success.

Bitmine, in particular, managed to build up the world’s largest Ethereum reserve in just months. When discussing why they chose to focus on Ethereum, the company’s executives cited recent market regulations, ETF popularity, and the pivotal role Ethereum will play in tokenizing traditional assets like stocks.

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2026 Could be Ethereum’s Year to Shine

When you examine the planned upgrades alongside today’s market conditions, it’s easy to envision a scenario where Ethereum expands significantly in 2026. The platform is ideally positioned to usher in institutional tokenization, and it has support from users and investors.

Also, its DeFi dominance remains intact despite several faster and more capable competitors emerging. All of these factors seem to signal that Ethereum investors have a lot to celebrate going into 2026.

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