Educational Post

What Is the Ethereum Pectra Upgrade?

The Ethereum Pectra is an upgrade (hard fork) that aims to make Ethereum faster, more scalable, and easier to use, both for everyday users and blockchain developers. Expected to roll out in two phases starting in 2025, Ethereum Pectra is set to be one of the most significant improvements to the Ethereum network in recent years.

Pectra is actually two upgrades that were initially planned to happen separately: Prague and Electra. They were combined into one to make things smoother.

Why Is Ethereum Upgrading?

Ethereum has been steadily improving since its creation, with many important upgrades like “The Merge” in 2022 (which switched Ethereum to Proof of Stake) and the “Cancun” upgrade in 2024.

However, Ethereum still faces challenges, especially around transaction fees, scalability, and how complex it can be for new users. The Pectra upgrade is designed to address these problems.

Major Features of the Pectra Upgrade

Let’s look at some of the biggest changes coming with the Pectra upgrade:

1. Account abstraction

Right now, Ethereum users need to have small amounts of ether (ETH) in their wallets to pay for gas fees. These fees are transaction costs that you need to pay whenever you make a transfer or interact with a decentralized app (DApp). For example, if you’re sending tokens to someone or trading NFTs, you have to use ETH to cover these costs.

With the Pectra upgrade, Ethereum will leverage a concept called account abstraction to enhance user experience. One of the benefits of account abstraction is that you won’t have to keep ETH just to pay for gas fees. Instead, you can pay with other tokens, like USDC or DAI, making it more convenient. The update will also allow third-party services to sponsor your gas fees, meaning you could pay little to no fees in some cases.

2. Smart contract efficiency

Through Ethereum Improvement Proposals (EIPs) like EIP-7692, the Ethereum Virtual Machine (EVM) will become more efficient, speeding up smart contract execution. This change benefits both developers and users by lowering the cost and complexity of deploying smart contracts.

3. Improvements for validators

You might have heard that Ethereum runs on a decentralized system where “validators” help confirm transactions and keep the network secure. Validators need to stake (lock up) 32 ETH to participate, and they earn rewards in return. But any amount of ETH over 32 just sits there and doesn’t earn any extra rewards. That’s not very efficient.

Pectra will introduce flexible staking withdrawals (EIP-7002) and increase the stake limit of validators from 32 to 2048 ETH (EIP-7251). This change will make the system more flexible and efficient, especially for people or companies who manage large amounts of ETH.

Additionally, Pectra will allow for “validator consolidation,” which means that large operations like Lido, which stake ETH for lots of users, will need to run fewer validator nodes. This can reduce the strain on the Ethereum network, making it faster and less resource-intensive.