On Wednesday, Ethereum activated its highly anticipated “Pectra” upgrade, marking the most substantial transformation of the blockchain since the Merge in 2022.
The primary focus of the update is to streamline staking, enhance wallet functionality, and improve overall operational efficiency. This upgrade arrives at a crucial time as Ethereum faces intensifying competition and ongoing discussions about its future direction.
The Pectra upgrade, referred to as a hard fork in blockchain terminology, was initiated at 10:05 UTC and reached completion approximately 13 minutes later.
One of the most groundbreaking aspects of this upgrade is the increase in the maximum amount of ETH that can be staked, rising from 32 to 2,048. This change is poised to significantly expedite operations for stakers—a vast network of individuals and organizations essential to maintaining the Ethereum network.
Previously, those interested in scaling their staking operations were required to establish multiple validators, but now they can consolidate their stakes under a single node, simplifying the process.
The Pectra upgrade is deemed Ethereum’s most significant enhancement since the 2022 Merge to proof-of-stake and comes at a sensitive time for the ecosystem. The upgrade follows two unsuccessful test runs, with one resulting in the permanent shutdown of a key Ethereum test network Holesky.
Moreover, Ethereum has steadily lost market share to more agile competitors in recent months. Notably, Solana has attracted more new developers over the last year than Ethereum, a network historically seen as the leading non-Bitcoin blockchain.
The Ethereum community has raised concerns regarding the effectiveness of its unofficial leader—the non-profit Ethereum Foundation—in addressing the declining price of the ETH token and the perception that the network lacks a coherent vision. In response, the Swiss foundation has introduced new leadership along with a revised plan aimed at revitalizing the chain’s developer community.
Staking Factors Improved
A pivotal element of the Pectra upgrade is EIP-7251, which increases the maximum amount validators can stake from 32 to 2,048 ETH.
This enhancement addresses the requirements of staking institutions and infrastructure providers by catering to the needs of validators who stake ETH for network operations. Previously, investors wishing to stake more than 32 ETH had to split their stakes across multiple nodes, a process that was not only time-consuming but also costly, leading to long queues for new nodes wishing to join the network.
By raising the staking limit, Tim Beiko, the protocol support lead at the Ethereum Foundation, explained, “This means that small operators can compound their stake directly, while large ones can consolidate validators to reduce bandwidth use on the p2p network,” as he noted in a post on X.
Account Abstraction and User-Friendly Wallets
Another significant improvement included in the upgrade is EIP-7702, which will enable crypto wallets to temporarily function as smart contracts. This development brings the Ethereum network closer to achieving account abstraction, a set of features designed to enhance the user-friendliness of crypto wallets.
For instance, users will have the option to pay transaction fees in stablecoins instead of ETH, establish automatic payment systems, or set up recovery access for their wallets in the event they forget their seed phrases.
Additional Enhancements in Pectra
While EIP-7251 and EIP-7702 are the highlights of the Pectra upgrade, nine other Ethereum Improvement Proposals (EIPs) have also been integrated into the package, primarily affecting staking providers, validators, and developers:
- EIP-2537: Introduces optimized cryptographic operations, enhancing efficiency for privacy tools.
- EIP-2935: Facilitates easier verification of data by storing more past block information.
- EIP-6110: Simplifies the joining process for new validators by managing their staking deposits more effectively.
- EIP-7002: Empowers validators to directly withdraw their funds, enhancing security for staking services.
- EIP-7549: Optimizes validator vote processing on the blockchain.
- EIP-7623: Adjusts costs associated with calldata that relates to data availability.
- EIP-7685: Establishes standardized communication methods between the execution layer and the consensus layer.
- EIP-7691: Expands the blockchain’s capacity for additional data blobs per block.
- EIP-7840: Introduces configurable settings for managing Ethereum’s data handling capacity per block.
Read more: Ethereum Preps for Biggest Code Change Since the Merge With Pectra Upgrade
UPDATE (10:22 UTC): This post has been updated to confirm the finalization of the Pectra upgrade.
