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The Ethereum (ETH) train continues to drive along to its destination, where it hopes to become the cryptocurrency highway of choice — one of mass adoption and scale.
The Pectra upgrade is the next station along the way, pushing hard for improvements to user experience, staking, and data availability.
What is the Pectra upgrade, how will it help Ethereum, and what might it mean to ETH’s price? Let’s find out.
Key Takeaways
- Pectra is the combination of two Ethereum upgrades named Prague and Electra and is expected to be the largest network upgrade that Ethereum has ever seen.
- The release date for Ethereum Pectra is expected to be early 2025.
- EIP-7251 reduces the number of Ethereum validators by encouraging the consolidation of nodes operated by the same entity.
- EIP-7702 will introduce new transaction types to improve the Ethereum user and developer experience.
What Is Ethereum Pectra Upgrade?
Pectra is an upcoming Ethereum upgrade that looks to make staking more efficient, improve user experience, build on the rollup-centric scaling roadmap, and improve Ethereum’s decentralization.
It is actually the combination of two Ethereum upgrades named Prague and Electra, giving us the final name of the next Ethereum upgrade: “Pectra.”
Before they were united, Prague aimed at making changes to Ethereum’s execution layer, while Electra focused on consensus layer upgrades.
The Ethereum Pectra upgrade date is expected to be early 2025 and is expected to be the largest update that Ethereum has ever seen.
The first test run was in November 2024, when the Pectra testnet called Mekong was launched.
⚡️ @Ethereum $ETH has announced the launch of the #Mekong testnet
Ethereum Foundation rolls out Mekong, the first short-lived testnet for the #Pectra fork on #Ethereum. The network brings all the EIPs proposed for the Pectra fork, including UX changes, staking changes, changes… pic.twitter.com/mB5GRIGepF
— 🇺🇦 CryptoDep #StandWithUkraine 🇺🇦 (@Crypto_Dep) November 7, 2024
There's a final all core devs call on December 19th then a break for the holidays. Starting in January it will be all hands on deck to ship Pectra ASAP. Exciting times ahead!
— Ethereum Core Developers (@ethcoredevs_) December 19, 2024
Ethereum Pectra Upgrade Explained: Main Proposals
As of December 2024, the Pectra upgrade consisted of nine Ethereum improvement proposals (EIP). These are the proposals, and we explore what they mean to the end user further down:
- EIP-2537: New precompile that allows 120+ bits of security for operations vs 80 bits of security in existing BN254 precompile
- EIP-2935: Saves historical block hashes to support stateless clients.
- EIP-6110: Supply validator deposits on chain
- EIP-7002: New mechanism to allow validators to trigger withdrawals and exits from their execution layer withdrawal credentials.
- EIP-7251: Increase the max stake limit of Ethereum validators from 32 ETH to 2048 ETH.
- EIP-7549: Provides extra data availability for Ethereum layer twos (L2).
- EIP-7685: Framework to allow validator smart contracts to undertake certain operations.
- EIP-7702: User experience-focused improvements to EOA users.
- EIP-7742: Uncouple blob count between consensus layer and execution layer.
EIP-6110, EIP-7002, EIP-7251, EIP-7549, and EIP-7742 will be implemented in Ethereum’s consensus layer.
Meanwhile, EIP-2537, EIP-2935, EIP-6110, EIP-7685, EIP-7002, EIP-7702, and EIP-7742 will change Ethereum’s execution layer.
Ethereum Pectra Upgrade: Main Features
Below are the Ethereum Pectra upgrade benefits from a user perspective.
More Efficient Ethereum Staking
At the time of writing, Ethereum limits a single validator stake at 32 ETH. This limitation has led to a large number of validator nodes run by a single entity.
With the introduction of EIP-7251, the max stake per validator node will be increased from 32 ETH to 2048 ETH. The minimum validator stake threshold will remain at 32 ETH to encourage solo staking.
The increase in max stake per validator node will allow large validators to consolidate to running fewer nodes, ultimately reducing the number of peer-to-peer messages and digital signatures.
Small validators will be able to increment their stake instead of accumulating ETH at multiples of 32 to run multiple validator nodes.
Ethereum had over 1.07 million daily active validators as of December 2, 2024. A large number of validators can result in high computational and bandwidth load on the network.
User Experience Improvements
The Pectra upgrade has EIPs to improve the user experience (UX) for Ethereum users and developers.
EIP-7702 will introduce new transaction types that will allow multiple operations from the same user to be conducted in one transaction. The upgrade will also allow accounts to sponsor gas fees for another account. We have previously explored this type of ‘gas abstraction.’
“Privilege de-escalation” is a new feature that will be introduced with EIP-7702 that will allow users to authorize condition-met spending. For example, permission to spend a specific type of ERC-20 token or permission to spend up to 2% of a total balance per day.
EIP-2537 will also introduce new functions used in zero-knowledge cryptography and EIP-7002, which are targeted at making the Ethereum staking pool experience more trustless by introducing a mechanism for smart contracts to trigger validator exits.
Improved Rollup Scaling
The Pectra upgrade builds on the success of data blobs introduced in proto-danksharding, which drastically reduced gas fees on Ethereum L2s.
EIP-7594 will introduce a new protocol called PeerDAS which will allow nodes to check that L2 blob data has been made available while downloading only a subset of the data.
How Will the Pectra Upgrade Affect ETH’s Value?
In a research note, Christine Kime, vice president of research at Galaxy, said that as Ethereum pursues its rollup-centric scaling roadmap, protocol upgrades on the L1 “should matter less to ETH value over time”.
Speaking of the impact of Ethereum Pectra’s upgrade, Kim said upgrades on L2s are likely to have the most effect on ETH’s value, as the revenue of Ethereum will likely be driven by user activity on L2s going forward.
“The upgrades that happen on L2s that advance UX, interoperability, decentralization, and security on these networks matter more to Ethereum’s value than the optimizations and improvements on the base layer,” Kim noted.
“Though upgrades like Pectra will further enhance the protocol’s decentralization and usability, they are not likely to attract a new wave of users and propel adoption for decentralized applications as rollups can scale to meet this demand, while Ethereum cannot,” she added.
Looking Ahead: What’s Next After Pectra?
As of December 2024, Ethereum developers have begun testing the Pectra upgrade on the Mekong testnet.
Insiders hinted that we may see the Pectra upgrade introduced as early as the first quarter of 2025.
The next Ethereum upgrade after Pectra will be called “Fusaka.”
The Fusaka Ethereum upgrade will consist of EIPs that were initially included in the Pectra upgrade but were ultimately removed due to the complexities involved.
The Bottom Line
Ethereum’s rollup-centric scaling plan has divided opinion, and it can be argued that uncertainties related to its scaling plan have affected its market valuation over the past year.
However, network upgrades like proto-danksharding and Pectra display the amount of planning and effort that happens behind the scenes, and Ethereum — effectively, the backbone for so much of crypto — will benefit from increased efficiency and more flexibility.
It can be more complex and offer more options — especially for builders and L2s — while becoming easier for the end user at the same time.
FAQs
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References
- CryptoDep on X: (Twitter)
- Ethereum Core Developers on X (Twitter)
- EIP-7251: Increase the MAX_EFFECTIVE_BALANCE (Eips.ethereum)
- EIP-7702: Set EOA account code (Eips.ethereum)
- EIP-2537: Precompile for BLS12-381 curve operations (Eips.ethereum)
- EIP-7002: Execution layer triggerable withdrawals (Eips.ethereum)
- EIP-7594: PeerDAS – Peer Data Availability Sampling (Eips.ethereum)
- Upcoming Ethereum Upgrades & Catalysts | Galaxy (Galaxy)
