Vitalik Buterin's Promotion of ZK-SNARKs and the Transformation of Blockchain Infrastructure

The blockchain sector is experiencing a subtle transformation, largely influenced by co-founder Vitalik Buterin’s recent push for zero-knowledge (ZK) technology. With the network gearing up for its Fusaka upgrade in December 2025, Buterin’s emphasis on refining ZK-SNARKs—especially by phasing out the modexp precompile—has prompted a fresh look at Ethereum’s scalability strategy and its impact on crypto infrastructure investment. Although this change is highly technical, it holds significant financial ramifications for developers, major investors, and rivals within the decentralized space.

The Modexp Precompile: A Limitation for

ZK

Scalability

Buterin’s latest and most prominent suggestion involves removing the modexp precompile, an older feature that once sped up cryptographic processes but now stands out as a major bottleneck for ZK-EVM operations. As noted by a

, the modexp precompile can make ZK proof computations up to 50 times more resource-intensive than regular Ethereum blocks, hindering the efficiency of ZK-rollups and other scaling methods. Buterin proposes replacing this precompile with standard EVM code, which he believes would simplify proof generation, even if it means a moderate 20-30% increase in gas costs—a compromise he considers worthwhile to benefit the broader ZK community rather than specialized applications, as reported.

This adjustment marks a deliberate shift toward future scalability. According to

, fewer than 0.01% of Ethereum users rely on the modexp precompile, yet its elimination would streamline ZK-proof creation, allowing for quicker transaction settlements and reduced expenses for layer-2 (L2) solutions. For investors, this could mean a sharp rise in ZK-rollup usage, especially in areas like decentralized finance (DeFi) and privacy-focused identity platforms, where improved efficiency may lead to measurable returns.

Fusaka and PeerDAS: Advancing Data Efficiency

Alongside the removal of modexp, the Fusaka upgrade will bring PeerDAS (Peer Data Availability Sampling) to the network. This feature lets validators check only segments of data instead of full "blobs," dramatically lowering bandwidth needs and expenses for both validators and L2 platforms, as

reported. As points out, PeerDAS represents a significant leap for Ethereum’s scalability, making it possible for the blockchain to function live without requiring any single node to store all the data—a crucial milestone for widespread adoption.

This upgrade also doubles the blob capacity introduced by the Dencun update, further cutting rollup transaction fees and enabling new possibilities such as micropayments and AI-powered blockchain applications, according to

. For those investing in infrastructure, Ethereum is positioning itself as a core platform for the next wave of applications, potentially drawing investment from industries outside of traditional crypto, like gaming and enterprise solutions.

Market Impact: ZK-SNARKs Driving Sector Change

The financial effects of these upgrades are already becoming apparent.

(ZEC), a privacy-oriented digital currency utilizing ZK-SNARKs, has seen its value jump over 400% in late 2025, with its shielded pool now accounting for 20% of the total supply, as reported. Arthur Hayes, founder of Maelstrom, has made his second-largest holding after , citing increased interest in privacy assets amid tighter regulations, as reported. Likewise, (IMX) has leveraged ZK-rollups to develop a gaming platform for top-tier titles, reaching a $920 million market value, as reported.

Still, Ethereum is facing strong rivals. Hyperliquid, a ZK-powered layer-1 for decentralized futures trading, captured 32% of blockchain trading revenue in September 2025, posing a challenge to Ethereum’s lead in high-volume applications, as

reported. This highlights a larger movement: ZK-SNARKs are expanding beyond Ethereum. Investors now need to assess projects across various blockchains, focusing on those with active developer communities and clear practical uses.

ROI Outlook and Risk Factors

Although predictions for ZK-SNARK infrastructure returns are still uncertain, early signs are encouraging. For example, a $250 investment in Ozak AI’s $OZ tokens could potentially grow 790 times by 2029 if the token price reaches $9-$9.6, fueled by its AI-centric blockchain design, as

reported. For projects built around Ethereum, the Fusaka upgrade’s ability to lower gas fees and boost L2 performance could generate similar momentum, especially if increases in blob capacity go as planned.

Nevertheless, there are still hurdles. Regulatory ambiguity, particularly concerning privacy coins, and the technical challenges of ZK-SNARKs remain significant. As

cautions, the Fusaka upgrade’s gradual approach to increasing blob capacity shows a careful strategy to maintain network stability. Investors should weigh optimism with caution, favoring projects that have clear development plans and strong institutional support.

Conclusion: Prioritizing Privacy for the Future

Vitalik Buterin’s support for ZK-SNARKs is more than just a technical update—it’s a strategic move to establish Ethereum as the foundation for a privacy-focused internet. By tackling obstacles like the modexp precompile and adopting solutions such as PeerDAS, Ethereum is setting the stage for a new generation of scalable, secure, and affordable blockchain systems. For investors, the opportunity lies in backing projects that share this vision, whether within Ethereum’s ecosystem or on emerging ZK-centric platforms.

With the Fusaka upgrade on the horizon, the upcoming months will reveal how resilient these advancements are—and test the resolve of those investing in them.