Fuel migrated to EigenDA for its data availability layer. The move away from Ethereum DA aligns the network with its long-term goal of reaching 150,000 TPS.
Major upgrades were made to Fuel’s native liquid staking protocol, The Rig. These upgrades allow stFUEL to be integrated into the broader DeFi ecosystem, providing new functionality for builders and users alike.
FUEL’s circulating market cap fell 20.7% to $28.3 million in Q3 2025, with the token price down 31.2%. However, average daily transactions on the network experienced significant growth, climbing 290.1% QoQ to 386,490.
Fuel concluded Fuel Forge I, a fully sponsored in-person builder residency in Costa Rica that included mentorship from VCs, intense prototyping, and pitching sessions. A second developer program, Fuel Forge II, was announced for January 2026 in Vietnam.
Primer
Fuel (FUEL) is an Ethereum Layer-2 powered by the FuelVM, built to enhance PSI (parallelization, state-minimized execution, interoperability). Fuel’s technology stack also includes the Sway programming language optimized for blockchain development. The network provides a suite of developer tools, such as Forc (Fuel Orchestrator) and Fuelup (toolchain manager), along with SDKs and APIs to facilitate development.
FuelVM utilizes a UTXO model with strict state access lists, which allows transactions to be executed in parallel. This capability enables the network to leverage multiple CPU threads and cores, increasing compute power, state access, and transaction throughput compared to traditional single-threaded blockchains.
Sway is a custom-built, domain-specific programming language optimized for blockchain development. It combines Rust’s safety mechanisms with Solidity’s smart contracts, including built-in contract storage and blockchain functionalities, which makes integrating blockchain-specific syntax easier. Sway prioritizes compile-time analysis and safety by offering static auditing for smart contracts. It also features a modular backend that can be adapted to different blockchain architectures.
The Fuel network refers to the broader Fuel ecosystem, encompassing its technology, community, and infrastructure. The network leverages Ethereum for data availability and features a one-second block time, with a focus on mitigating state growth and state bloat issues. Fuel v1 was the first Layer-2 network to reach the status of being a Stage 2 Appchain Optimistic Rollup.
Fuel Ignition, an Optimistic rollup on the Fuel Network, marks the transition from development to a fully operational network. Fuel Ignition was built with state-growth and state-bloat mitigation in mind, addressing what many consider blockchain’s fundamental bottleneck. It also benefits from a hybrid proving system utilizing zero-knowledge proofs (zkps). Fuel Ignition has low fees and high throughput, achieving over 5,000 transactions per second (TPS) in a devnet environment when using Eigen data availability and up to 21,000 TPS per CPU core, making it one of the most scalable Ethereum Layer-2 solutions. Fuel Ignition launched on Oct. 15, 2024, and the Token Generation Event (TGE) for FUEL occurred on Dec. 19, 2024.
Q3 2025 was the third full quarter since FUEL’s TGE on December 19, 2024. During the quarter, FUEL’s circulating market cap decreased 20.7% to $28.3 million, and the token price declined 31.2% quarter-over-quarter (QoQ) to $0.0046.
Fuel Token
FUEL has a total token supply of 10 billion, with an annual inflation rate of 3%, introduced through protocol-level rewards (e.g., sequencer incentives). FUEL plays three primary roles in the network:
Securing the network through staking
Paying for onchain resources (compute, storage, data availability)
Enabling application-specific sequencing
FUEL’s unlock schedule follows a tiered structure based on participant category:
Community and Ecosystem & R&D: Unlocked at launch (TGE)
Contributors (24-month), Purchasers, and Ecosystem & R&D (24-month): Unlock linearly over 24 months post-TGE
Contributors (48-month): Unlock linearly over 48 months post-TGE
Notably, it has been hinted that FUEL tokenomics 2.0 is being worked on, designed to better align network growth with utility and long-term sustainability.
Token Migration
August 18, 2025, marked the final day for FUEL V1 tokenholders to migrate to FUEL V2, following a governance proposal made by the Fuel Foundation on June 4. The proposal aimed to motivate V1 tokenholders to migrate to V2 by changing the unlocking schedule start date from December 19, 2024, to August 19, 2025, for those who did not migrate. Tokenholders who migrated to FUEL V2 were able to retain their original unlocking schedule, a 24-month linear unlock starting December 19 (TGE date). Overall, the migration was designed to align tokenholders with the current Fuel Ignition ecosystem by minimizing the number of outstanding unmigrated tokens.
Network Overview
Liquid Staking
Q3 2025 was a pivotal quarter for Fuel’s native liquid staking protocol, The Rig. On September 30, withdrawals went live, allowing users to exit staked FUEL positions. The protocol maintains a liquidity buffer of 5-10% of staked TVL to handle small withdrawals without waiting for validator unbonding, while larger withdrawals of over 5 million FUEL are subject to a 14-day unbonding period plus bridging time. In total, the average withdrawal time is approximately 18 days. Alternatively, users can opt to swap stFUEL for FUEL on Microchain (formerly Mira) for instant liquidity.
On October 7, Fuel announced the transition from the original staking model on Fuel Ignition to liquid staking, allowing users access to stFUEL, the protocol’s liquid staking token. All staking positions made through Fuel Ignition have been moved to The Rig. This upgrade introduces new capabilities for both users and builders:
Users can now earn validator rewards without sacrificing liquidity. stFUEL holders can use their tokens across Fuel DeFi protocols, allowing them to earn additional yield on top of the auto-compounding APY earned via validator rewards.
Builders on Fuel can now integrate stFUEL into DeFi protocols on the network. Products like lending markets, leverage vaults, and stFUEL LP strategies are just a few examples of the different integrations available to developers post-upgrade.
The Rig’s TVL ended Q3 at $2.1M, marking a 174.5% QoQ increase from $781,769 in Q2.
Data Availability
On July 15, Fuel Mainnet began posting blobs on EigenDA, migrating its data availability layer away from Ethereum. This upgrade aims to move Fuel closer towards its goals of 150,000 transactions per second (TPS) and improve throughput to support dApps like o2, which demand execution that scales with usage. Fuel plans to raise the network’s block size limit in the near future, increasing the max TPS the system can handle. According to the Fuel team, the network can currently process approximately 5,000 TPS in a devnet environment, up from 600 TPS on Ethereum DA.
Oracle Integration
Fuel’s partnership with Stork marks a major milestone for the network’s DeFi ecosystem. On August 13, Stork’s 450+ data feeds went live on Fuel Ignition, allowing developers on the network to leverage the oracle’s customizability for exotic assets like NFTs, RWAs, and other niche use cases. Stork is specifically optimized for Layer-2 networks with data feed updates every 400 milliseconds, essential for dApps like lending platforms or DEXs that require low latency and high throughput.
Stork is the fourth oracle live on Fuel mainnet. Other supported projects include:
Pyth: The protocol is primarily used on Fuel for price feed data within the network’s DeFi ecosystem.
ORAO: The network’s verifiable random function (VRF) provides transparent random data on Fuel using a multinode architecture and byzantine quorum. Random data is ideal for use cases that require fairness, such as lottery applications, gaming, and NFTs.
Redstone: The oracle service provides a modular oracle structure for dApps on Fuel. Redstone stores data offchain until it is required for onchain usage, enhancing efficiency in Fuel’s data management system.
Bridge Upgrade
On August 27, Fuel announced that withdrawals on the Fuel Canonical Bridge were reduced from seven days to one day. Historically, optimistic rollups like Fuel Ignition have featured a seven-day challenge window to allow time for an honest minority to detect and contest invalid state change, and ensure a challenge can eventually be submitted in the event of a mass-censorship attack on the underlying Layer 1. On the back of progress in zero-knowledge (ZK) technologies, Fuel has evolved its architecture to support one-day exits through ZK-validium infrastructure and Ethereum’s “Why wait a week?” mechanism.
While fraud proofs are not currently live, Fuel Ignition leverages a multi-validator architecture with continuous onchain monitoring and offchain alert systems to provide security and censorship resistance without requiring a lengthy withdrawal window. Reducing the withdrawal window improves capital efficiency, improves UX for bridgers, and aligns the network with future design goals. In the long run, Fuel Ignition aims to make the withdrawal window instantaneous through a cryptographically secure and trust-minimized Validium design.
Ecosystem Overview
Usage
Fuel Ignition processed an average of 386,490 transactions per day in Q3 2025, marking a 290.1% QoQ increase from 99,100 in Q2. This marked increase is likely due to two new protocols launched on Fuel mainnet during Q3:
Py Rocks: The protocol is an onchain mining game built by the Fuel Forge team. Users begin with an initial balance of PY tokens and a basic drill used to compete for further tokens. The game is in Alpha with plans to introduce burning, staking, and new mechanisms.
o2: The protocol is a central limit order book (CLOB) that aims to provide a fast, private, and decentralized trading experience for Fuel Ignition users. The project is built by the Fuel team and is in a private testing stage on mainnet. o2 will initially be focused on spot trading, but perps, lending markets, and advanced derivatives offerings are on the roadmap. The protocol’s matching engine only requires approximately 200 lines of code, reducing surface areas for bugs and minimizing transaction costs.
DeFi
Activity on Fuel Ignition remained concentrated in three protocols: Microchain, SwayLend, and The Rig, which together accounted for approximately 96.9% of total DeFi TVL.
Microchain maintained its position as the leading DEX, with $3.7 million in TVL despite a 12.5% QoQ decline. The protocol rebranded from Mira Protocol on August 6, alongside routing and execution upgrades. The team also claims Microchain is the fastest automated market maker (AMM) in crypto, with end-to-end swaps in under 50 milliseconds. The protocol supports token swaps and liquidity pools, including new assets like stFUEL.
SwayLend, Fuel’s primary lending platform, retained $2.9 million in TVL, up 11.2% from Q2. The protocol plans to fully support o2’s public launch, aiming to provide an institutional-grade trading experience. Support for stFUEL is also on the project’s roadmap, allowing users to borrow against Fuel’s liquid staking token.
Smaller protocols saw mixed performance. TVL on Fluid Protocol grew 31.9% to $214,028 while Ruscet and Diesel Dex closed the quarter with 5.8% and 48.4% declines, respectively.
Fuel’s DeFi ecosystem is expanding, headlined by two new protocols:
Axios Finance: The project is a fixed-rate borrowing and lending platform that aims to bring predictable borrowing costs and steady yield to users on Fuel Ignition. The protocol’s waitlist is currently live and has accumulated 2,500 sign-ups as of September 29. Axios plans to launch its testnet in Q4.
Reactor DEX: The project is a DEX that leverages the concentrated liquidity automated market maker model (CLAMM) introduced via Uniswap V3, which allows liquidity providers to allocate capital within defined price ranges. On September 22, Reactor announced a trading competition on Fuel’s testnet, offering $1,000 to the top five traders. The competition concluded on September 30, ending with over $4B in total testnet trading volume on the FUEL/USDC pair.
Ecosystem Initiatives
The Fuel Foundation conducted two pilot incentive programs to encourage onchain activity on the network that ran from August 25 to September 25:
Trading Fee Rebates: Traders on Microchain, the network’s primary DEX, were given rebates on all trading fees incurred on the FUEL/USDC pair. The rebates were distributed via bulk send to eligible addresses at the end of September in the form of FUEL tokens.
Gas Fee Rebates: The second incentive program allowed eligible ecosystem builders to apply for gas rebates to provide a gasless UX for a given protocol’s users. Approved projects were given rebates issued by the Fuel Foundation, which were subsequently used to cover all gas fees. In the future, there are plans to facilitate fee rebates within a given protocol through bonding mechanisms and application-specific sequencing. This upgrade would allow projects to fund gasless UX with their own tokens, rather than FUEL distributed by the Fuel Foundation.
Developer Programs
Fuel’s first in-person builder residency program, Fuel Forge I, took place in Costa Rica during August. The three-week program included full funding, technical mentorship, and ecosystem support for early-stage teams. The first week was the idea phase, where eight project teams were mentored on prototyping, strategy, branding, and more. The second week was the product phase, where teams focused on coding and prototyping using Sway and Fuel’s architecture. Finally, the third week was the pitch phase, where VCs were invited to provide mentorship, give feedback on pitches, and help shape strategy for the project teams.
Of the eight projects, six were chosen as finalists. The projects include:
Starboard Finance: The protocol is a perpetual futures exchange on emerging markets. The waitlist went live on September 29.
Vice: The project aims to launch a provably fair and decentralized casino dApp.
Haven: The project offers access to a non-custodial card for permissionless spending of onchain funds. Haven aims to maintain privacy guarantees through No-KYC onboarding and optional multi-sig wallet setups. The waitlist went live on September 18.
Code Riots: The platform features live hackathons where users can host, compete, or back participants to win onchain prize pools. The waitlist went on September 6.
Reckless AI: The project aims to launch an AI agent platform for cross-chain risky DeFi strategies.
Cinder: The project aims to develop an AI-based launchpad protocol.
Following the conclusion of Fuel Forge I, it was announced that a second developer program, Fuel Forge II, is planned for January. The three-week program will take place in Vietnam, and registration for the event is live.
Closing Summary
Fuel’s third quarter post-TGE was characterized by meaningful infrastructure upgrades and community development that lay the foundation for long-term expansion of the Fuel Ignition ecosystem. The transition to EigenDA for the network’s data availability layer marks a pivotal milestone in Fuel’s scalability goals, while upgrades to The Rig allow for a core asset, stFUEL, to be integrated into the broader DeFi ecosystem.
While market cap and TVL declined in Q3, the significant increase in daily transactions highlights demand for high-frequency, lower-capital transactions on the network. Recent launches like Py Rocks and o2 fall into this category, as they leverage Fuel Ignition’s scalability and high throughput to support frequent onchain activity.
Ecosystem growth initiatives like Fuel Forge I have led to the introduction of a multitude of different dApps awaiting mainnet launch. Other upcoming launches like Axios and Reactor DEX highlight the interest in Fuel’s value proposition amongst onchain builders. The combination of commitment to scaling the underlying network and support for ecosystem developers positions Fuel as a leading blockchain for the next era of high-throughput applications.
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Entering crypto in 2020, Shale has experience as a trader, angel investor, and co-founder in the space. He graduated from the University of Washington, studying psychology and business. His interests include DeFi and Consumer Crypto.
Entering crypto in 2020, Shale has experience as a trader, angel investor, and co-founder in the space. He graduated from the University of Washington, studying psychology and business. His interests include DeFi and Consumer Crypto.
