3 Reasons to Buy Ethereum Before Dec. 2

Great investing decisions can sometimes come down to buying the right asset before the obvious upcoming catalysts have a chance to impact its price. For Ethereum (CRYPTO: ETH) the biggest upcoming catalyst is its next network upgrade, called Fusaka, which is slated to launch on Dec. 3.

Buying before then will position you ahead of the crowd if the upgrade performs as designed and the ecosystem leans into the new features. Here are three reasons this coin is worth buying in the next few weeks.

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1. More capacity

Fusaka is slated to advance with Ethereum's scaling-by-rollups strategy, in which groups of users seeking faster or cheaper performance are incentivized to create Layer-2 (L2) networks that "roll up" bundles of transactions before sending them back to the main Layer-1 Ethereum network for processing, thereby improving efficiency.

One key innovation of Fusaka is a data-availability change that lets the main network handle much more rollup data at a time. In plain English, rollups will thus get room to grow, and users should see fewer scary gas (user) fee spikes when activity surges. So it's possible that one of the chain's most frustrating and long-lived problems will finally be put to rest, making it more usable. And that's a solid reason to consider buying the coin.

There are a few other base-layer tweaks to improve scaling, too, like gas limit adjustments in Fusaka that increase block capacity, which should further reduce pressure when traffic spikes. More throughput plus better data handling is exactly how you avoid fee blowouts while keeping the network decentralized.

2. Staking will become safer and more stable

Fusaka will also improve Ethereum's staking experience, which means it will make getting a yield on your Ethereum a bit less painful and a bit more reliable.

Despite what many investors seem to assume, the process of staking and getting a yield is not magic, and the existence and smooth operation of the infrastructure that enables it is not to be taken for granted. It comes with operational risk and a somewhat specialized (and thus expensive) hardware burden. Fusaka's approach reduces some of these hardware constraints for validators, lowering the barriers to running a node and opening the door for broader participation in the staking process.

Broader validator sets tend to reduce centralization risk. That matters for investors because concentrated operator sets can fail when the chain is under heavy load, cratering its performance and annoying everyone using it. Encouraging more independent operators and less specialized hardware requirements will likely lead to staking rewards swinging far less wildly when the network is under stress.

There is a chance that yields will compress if staking participation rises a lot after Fusaka. But smoother operations and lower tail risks for validators are usually a positive trade for long-term investors seeking durable, lower-variance staking outcomes, and the Ethereum development team wouldn't be making this change if they didn't think it was the healthiest move for the chain in the long run, and that's why it's another reason to buy the coin.

3. Developers have fewer reasons to leave

If decentralized application (dApp) developers don't have a good reason to develop on a particular chain, they will leave and go to where the grass is greener, which is usually the same destination as where there's more capital in the ecosystem.

Currently, Ethereum has one of the largest populations of developers in the crypto sector, with its Ethereum Virtual Machine (EVM) being deployed both on its own chain and on many other unaffiliated chains that want to be able to draw from the same pool of talent. So, it's actually quite easy for an Ethereum developer to pick up and leave for another chain without needing to learn too much of anything new at many of the networks where they might end up.

As mentioned previously, Fusaka explicitly targets increasing data throughput for rollups and adding some incremental L1 capacity, two of the levers that most affect user experience today, not to mention the experience for app developers. If developers can serve users at lower cost without abandoning Ethereum's security, familiarity, and deep liquidity, the attractiveness of its ecosystem strengthens, and they will be far more likely to stick around.

That will seed more projects over time, and make sure that Ethereum remains the chain with the biggest and most diverse ecosystem, thereby reaffirming the durability of two of the biggest points in the investment thesis for buying it.

Alex Carchidi has positions in Ethereum. The Motley Fool has positions in and recommends Ethereum. The Motley Fool has a disclosure policy.