Over the past two years, Ethereum has increasingly found itself in a structural paradox: mainnet transaction activity has gradually softened, while value capture at the Layer 1 level appears to have weakened. At the same time, the Layer 2 ecosystem has expanded rapidly, processing millions of transactions daily and accumulating substantial total value locked. This divergence between a relatively subdued L1 and a highly active L2 ecosystem has raised a fundamental question: whether Ethereum’s mainnet is evolving primarily into a settlement layer for L2 networks, rather than remaining the central execution environment of the broader crypto economy.
The Glamsterdam upgrade emerges as a direct response to this structural tension. Following the successful activation of the Pectra and Fusaka hard forks in 2025, Ethereum core developers have focused on two long-standing constraints: MEV-related centralization risks in block construction and the performance limitations of sequential transaction execution at the execution layer. In parallel, institutional participation in Ethereum staking has continued to develop, with staked ETH exchange-traded products contributing an additional layer of demand-side dynamics.
Together, these developments reflect a convergence of protocol-level redesign and capital-structure evolution forming around the Glamsterdam upgrade narrative.
According to Gate market data, as of May 22, 2026, Ethereum is priced at $2,134.94, down 0.43% over 24 hours, with a market capitalization of approximately $257.656 billion, representing 7.39% of the total crypto market. Over the past 90 days, ETH has fluctuated between local lows near $1,800 and highs approaching $2,465, with overall market sentiment remaining neutral.
Core Definition of the Glamsterdam Upgrade
Glamsterdam is a planned Ethereum execution-layer hard fork scheduled for deployment in the first half of 2026. It combines the consensus-layer name "Gloas" and execution-layer name "Amsterdam." The upgrade is centered on two key Ethereum Improvement Proposals: EIP-7732 (ePBS, protocol-enforced proposer-builder separation) and EIP-7928 (BAL, block-level access lists), alongside a series of gas repricing adjustments.
The primary objective of Glamsterdam can be summarized as follows: replacing external trust assumptions with protocol-level rules, enabling parallel execution to overcome sequential bottlenecks, and improving L1 scalability to reinforce its role as a high-value settlement layer.
From Pectra to Hegotá: Engineering Evolution
Completed Upgrade Foundations
Ethereum’s protocol development reached a faster iteration cycle in 2025, shifting from annual upgrades to multiple hard forks per year. The Pectra upgrade, activated on May 7, 2025, introduced EIP-7702, enabling externally owned accounts to behave more like smart contract wallets, and increased the maximum validator stake from 32 ETH to 2,048 ETH.
The Fusaka upgrade, activated on December 3, 2025, introduced PeerDAS (data availability sampling), significantly expanding blob capacity and increasing the block gas limit from 45 million to 60 million. These upgrades collectively established the data availability and staking infrastructure required for subsequent scalability improvements.
Glamsterdam Development Progress
As of May 2026, development progress includes several key milestones:
In April 2026, the Ethereum Foundation published Checkpoint #9, noting that ePBS implementation remains more complex than initially anticipated. The design introduces a separation of block production responsibilities within consensus, requiring the protocol to manage potential inconsistencies between different participants across the block-building process.
In early May 2026, more than 100 core developers gathered in Svalbard, Norway for the Soldøgn Interop meeting, reaching alignment on multiple technical parameters. The Ethereum Foundation confirmed that ePBS has reached stable operation across multi-client Glamsterdam devnets, with external block builder pipelines completing end-to-end testing across major client implementations. In addition, the EIP-8037 state access repricing proposal reached its final draft stage and was parameterized on the bal-devnet-6 test network. The meeting also established a 200 million gas limit target for future consideration.
Next Upgrade: Positioning of Hegotá
In early 2026, the Ethereum Foundation’s "Protocol Priorities Update" outlined both Glamsterdam and the subsequent Hegotá upgrade under three strategic themes: scalability, user experience improvement, and L1 hardening.
Hegotá is expected to focus on introducing fork-choice enforced inclusion lists to enhance censorship resistance, advancing account abstraction, and supporting Verkle tree adoption to improve state efficiency. The two upgrades form a sequential roadmap: Glamsterdam focuses on performance and throughput, while Hegotá targets long-term sustainability and protocol efficiency.
The Triple Transformation: ePBS, Parallel Execution, and Gas Repricing
ePBS: From External Coordination to Protocol Enforcement
At present, a significant portion of Ethereum block production relies on external relay infrastructure such as MEV-Boost systems to implement proposer-builder separation. While this architecture improves efficiency, it also introduces dependencies on off-protocol coordination mechanisms and specialized intermediaries.
Through EIP-7732, Glamsterdam integrates proposer-builder separation directly into the Ethereum consensus layer. Under this design, block builders submit bids for candidate blocks, while proposers select the most economically optimal option. The entire process is enforced by protocol rules rather than external coordination layers, reducing reliance on third-party intermediaries.
Model-based estimates from early test environments suggest that protocol-level PBS integration may significantly reduce MEV extraction and lower transaction fees under certain network conditions. However, these outcomes remain dependent on mainnet implementation and real-world execution dynamics. Ethereum co-founder Vitalik Buterin has described ePBS as an important step in reducing external dependencies, while noting that block-building markets may still exhibit structural concentration.
A 2026 academic analysis further explored distribution effects under ePBS, estimating that value distribution among block builders may become more concentrated, while a larger share of block value flows toward proposers. These findings highlight that while trust assumptions are reduced, new forms of economic concentration may still emerge within the block production process.
BAL and Parallel Execution: Scaling Through Non-Conflicting Transactions
Ethereum’s current execution model processes transactions sequentially, limiting throughput under high demand conditions. EIP-7928 introduces a block-level access list mechanism that allows builders to pre-declare storage and account access patterns, enabling validators to identify non-conflicting transactions and execute them in parallel across multiple processing cores.
According to technical specifications, a significant portion of transactions access non-overlapping state regions, creating a foundation for parallel execution under real-world workloads.
When combined with higher gas limits, this parallel execution model may materially improve overall throughput. Under theoretical assumptions, network performance could approach significantly higher transaction processing capacity compared to the current baseline. For end users, this may translate into lower transaction fees and improved execution efficiency for decentralized finance applications. However, all performance projections remain dependent on real-world adoption patterns and execution conditions.
Gas Repricing and State Sustainability
EIP-8037 introduces a fixed cost_per_state_byte pricing mechanism aimed at controlling long-term state growth under higher throughput conditions. Under this model, contract deployment and account creation costs are expected to increase, while storage-intensive operations are priced more granularly to reflect their long-term impact on network state.
This mechanism is designed to balance scalability with long-term node sustainability, ensuring that increased transaction capacity does not lead to uncontrolled state expansion.
Technical Summary
| Metric | Baseline | Post-Upgrade Projection | Notes |
|---|---|---|---|
| Theoretical TPS | ~1,000 | Significantly higher (model-based estimate) | Depends on workload structure |
| MEV Extraction | Baseline | Potential reduction (est. model-based) | Not guaranteed |
| Transaction Fees | Baseline | Potential decrease (est. model-based) | Depends on demand conditions |
| State Growth Control | Unbounded | Constrained model via EIP-8037 | Protocol-defined limits |
| Contract Deployment Cost | Baseline | Higher relative cost | Intended for state control |
Contested Narrative: The Role of Layer 1
Pro-L1 Scaling Perspective
Supporters of the upgrade argue that while the rollup-centric roadmap has successfully expanded Ethereum’s scalability, it has also contributed to liquidity fragmentation across multiple Layer 2 environments. In this view, improving Layer 1 throughput may allow a portion of high-value economic activity to return to the mainnet, particularly for applications requiring stronger settlement guarantees.
Structural Risk Perspective
Others emphasize that while ePBS reduces reliance on external coordination layers, block construction may still concentrate among specialized entities with advanced infrastructure capabilities. Additionally, "toxic MEV" (an industry term referring to harmful MEV behaviors such as sandwich attacks; not an official Ethereum protocol classification) is not eliminated but may shift in structure. Higher gas limits may also increase hardware requirements for validators, potentially influencing participation dynamics. These effects remain subject to ongoing research and real-world validation.
Balanced Interpretation
A more moderate perspective suggests that Glamsterdam’s significance lies not solely in performance improvements, but in its interaction with broader market structure changes. Protocol upgrades may enhance L1 efficiency, while staking-related financial products may influence circulating supply dynamics. The interaction of these factors could shape Ethereum’s medium-term structural evolution.
Industry Impact Analysis: Three Structural Forces
Impact on Layer 2 Ecosystems: Functional Rebalancing
Glamsterdam is unlikely to eliminate the role of Layer 2 networks. Instead, it may contribute to a clearer functional separation. High-value settlement activities and applications requiring strong finality may increasingly rely on Layer 1, while Layer 2 networks continue to support high-frequency and low-cost transactions. This could result in a more differentiated multi-layer ecosystem rather than a purely competitive relationship.
Staking Economics and Validator Incentives
The introduction of ePBS may reshape validator revenue composition. At present, MEV-related income is highly variable and dependent on off-protocol coordination mechanisms. Under ePBS, MEV distribution becomes more protocol-defined, potentially improving predictability for validators. This may also enhance the viability of independent and home-based staking participation, subject to hardware and network requirements.
Institutional Participation and Ethereum’s Yield Profile
The iShares Staked Ethereum Trust ETF (ETHB), launched on Nasdaq in March 2026, represents one example of increasing institutional exposure to Ethereum staking yields. According to publicly reported market data, the product recorded initial assets under management of approximately $100 million, with early inflows contributing to further growth in subsequent weeks.
The product design allocates a portion of ETH holdings to staking via institutional custody providers, with a significant share of staking rewards distributed to investors after fees. Fee structures include temporary promotional reductions during early asset growth phases.
From a structural perspective, staking-based products contribute to reducing circulating ETH supply by locking assets into validator participation. Combined with protocol-level efficiency improvements, this introduces a dual-layer dynamic affecting both supply and demand. While ETH is increasingly viewed as a yield-bearing digital asset, its risk-return characteristics remain subject to market volatility and evolving regulatory frameworks.
Conclusion: A Structural Inflection Phase for Ethereum
Ethereum is currently positioned at a critical stage of protocol evolution. On one side, the rollup-centric roadmap has enabled substantial scalability gains but introduced fragmentation across execution environments. On the other side, institutional participation is increasing, reflecting growing recognition of Ethereum as a programmable, yield-generating digital asset.
The significance of the Glamsterdam upgrade lies not in resolving all structural challenges, but in addressing key bottlenecks directly through protocol-level redesign. ePBS reduces reliance on external coordination mechanisms, parallel execution aims to improve throughput efficiency, and gas repricing introduces constraints to maintain long-term sustainability.
As with all major protocol upgrades, outcomes remain uncertain and dependent on real-world implementation. However, once activated, Glamsterdam is expected to mark a meaningful transition in Ethereum’s technical and economic architecture, influencing the evolution of the broader crypto ecosystem.
