What is Fuel Network (FUEL)?

Deep Dive

1. Technology & Architecture

Fuel uses FuelVM, a register-based virtual machine optimized for parallel transaction processing, enabling faster execution than Ethereum’s stack-based EVM. Its UTXO model (like Bitcoin) allows multiple transactions to be processed simultaneously, reducing bottlenecks.

In July 2025, Fuel migrated its data availability layer to EigenDA, boosting throughput from 600 to 5,000+ transactions per second (TPS) in devnet environments. This modular approach separates execution from data availability, aligning with Ethereum’s rollup-centric roadmap.

2. Tokenomics & Governance

FUEL tokens power staking, validator incentives, and governance. Users can stake on Ethereum (for security) or Fuel Ignition (for lower fees), with a 3% annual inflation rate set by validators. The network transitioned from a fixed validator set to a permissionless model, aiming for full decentralization by late 2025.

Token holders can participate in governance proposals, such as protocol upgrades and inflation adjustments, via on-chain voting.

3. Ecosystem & Use Cases

Fuel targets high-performance applications like decentralized exchanges (e.g., Mira DEX) and AI-driven DeFi. Key partnerships include:
- StorkOracle – Provides real-time price feeds for assets like stFUEL.
- Layerswap – Enables zero-fee asset transfers between Fuel and chains like Base.
Developers are building intent-based protocols and ZK-powered perpetual trading platforms, aiming to rival centralized exchange speeds.

Conclusion

Fuel Network combines Ethereum compatibility with a scalable architecture tailored for demanding applications. Its focus on parallel processing and modular design positions it as a contender in the Layer 2 race. Will its technical advantages translate into widespread developer adoption as the ecosystem matures?