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Key Takeaways

The Ethereum Pectra upgrade, starting in 2025, is set to make the Ethereum network faster, more scalable, and easier to use.

Key changes include letting users pay gas fees with different tokens, speeding up smart contracts, and improving staking rewards for validators.

Long-term benefits include better scalability and lower costs, with features like Verkle trees and PeerDAS supporting Ethereum's growth and usability.

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.

4. Verkle Trees for better data management

One of the technical improvements coming with Pectra is the introduction of Verkle trees, which will allow nodes to store less blockchain data. Now, this might sound complicated, but it’s an upgrade that will make the Ethereum network faster and more scalable by improving how data is stored and verified. 

In other words, Verkle trees are a new way to organize data that’s more efficient than what Ethereum uses now. They help reduce the amount of storage needed and speed up transaction processing. This means Ethereum will likely become faster and cheaper to use in the long run.

5. Layer 2 solutions and PeerDAS

Ethereum’s Layer 2 (L2) solutions, like Arbitrum and Optimism, are designed to handle a lot of transactions off the main Ethereum network. This helps reduce congestion and brings down transaction costs (gas fees). 

Pectra will improve these L2 solutions by introducing Peer Data Availability Sampling (PeerDAS), a technology that makes it easier to handle data for these L2 networks. Essentially, PeerDAS will help make Layer 2 even cheaper and faster, which is great news for anyone who uses Ethereum-based apps or does a lot of transactions.

Why Is the Pectra Upgrade Being Split Into Two Parts?

The Ethereum Pectra upgrade was originally supposed to happen all at once, but Ethereum developers realized that trying to implement everything at the same time would be too complex and risky. Instead, they decided to split the upgrade into two parts.

Part one (early 2025): The first phase will focus on immediate improvements like account abstraction and validator upgrades. These changes will make Ethereum more user-friendly and improve staking rewards.

Part two (expected in 2026): The second part will bring in more technical improvements, like the EVM Object Format (EOF), which will make smart contracts more efficient, and PeerDAS, which will supercharge Layer 2 scalability.

How Will The Ethereum Pectra Upgrade Impact You?

Regular users: One of the biggest benefits is that you’ll no longer need to hold ETH just to pay for gas fees. You’ll be able to use other tokens to cover fees, making it easier to interact with Ethereum DApps and services. Plus, the improvements in how validators work should make the network faster and more secure.

Validators and stakers: If you’re someone who stakes ETH or runs a validator, the upgrade will allow you to manage larger amounts of ETH more efficiently. You’ll earn rewards on any amount over 32 ETH, which wasn’t possible before. Validator consolidation will also make it easier to manage your staking operations and reduce the strain on the Ethereum network.

Developers: Pectra brings improvements to the Ethereum Virtual Machine (EVM), the environment that runs smart contracts. These changes will make it faster and cheaper to write and deploy contracts, which is great for developers building decentralized apps.

The Long-Term Benefits of Ethereum Pectra

While some of the improvements will be immediately noticeable, the Pectra upgrade is more about setting the stage for Ethereum’s long-term growth. By making the network more scalable and efficient, Pectra is helping prepare Ethereum for the future, when even more people and businesses will use it.

The introduction of Verkle trees and the improvements to Layer 2 solutions mean that Ethereum will be able to handle more transactions at lower costs, which is essential as the network continues to grow.

Closing Thoughts

The Ethereum Pectra upgrade is a huge step toward making Ethereum faster, cheaper, and easier to use. By splitting the upgrade into two parts, developers are ensuring that each phase brings meaningful improvements without overloading the network. Whether you’re an everyday user, a validator, or a developer, the Pectra upgrade is set to bring new features that improve your experience with Ethereum.

Further Reading

What Is the Ethereum Cancun Upgrade?

The Merge Ethereum Upgrade: All You Need To Know

What Is Ethereum 2.0 And Why Does It Matter?

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