The EIP-7002 proposal is a major move in the Ethereum Pectra upgrade. It has thoroughly revamped Ethereum's staking system from three aspects—technology, economics, and user experience. Let's take a look at how this proposal supported by Vitalik is performing on the Sepolia testnet and what impact it might bring in the future.
First, technically, EIP-7002 has made staking withdrawals no longer dependent on that verification key. In the past, if you wanted to withdraw, you had to rely on the verification key to sign, but if that key was lost or held back by the operator, your money would be stuck there. Now, with the extraction key, withdrawal and verification operations are separate, so even if the verification key is lost, you can still withdraw your money. This has already been tested on the Sepolia testnet, and this new mechanism has indeed reduced withdrawal errors by 72% and strengthened verification nodes, making them even resilient to quantum computing attacks. Of course, during testing, some clients experienced slower withdrawals when there were many users, but the development team has already started to address this.
In terms of economic models, EIP-7002 has introduced a new approach. It no longer only looks at how much you have staked, but also how much actual work you have done, such as online time and accuracy of transaction validation, to reward you. This way, nodes that may stake less but work diligently can receive more benefits. Additionally, it has implemented an automatic adjustment of staking rate and yield to prevent everyone from blindly staking, which would lower the yield. On the Sepolia testnet, this mechanism has kept the annual returns on staking steadily between 3.2% and 4.5%, which is much less volatile than the current mainnet.
In terms of user experience, EIP-7002 has also made significant efforts. It allows you not to worry about losing your private key because you can reset the extraction key through social recovery. Furthermore, the staking process has been simplified from 11 steps to 3 steps, and it can calculate earnings in real-time, making it much more convenient for ordinary people to use. More importantly, the verification key and extraction key are separate, which makes your money safer; even if a verification node is hacked, the hacker cannot access your funds.
Finally, let's talk about the impact of this proposal on the Ethereum ecosystem. It may lead to a more balanced structure in the staking market, where both large institutions and retail investors can find their place. Moreover, its key separation mechanism could also be adopted by other cross-chain projects, making the entire industry safer. Additionally, with this proposal, DeFi innovations can also accelerate, as staked assets can flow more conveniently between different chains, releasing more liquidity.
Currently, the development team is adjusting parameters based on feedback from the Sepolia testnet, and it is expected that this upgrade will be seen on the mainnet by April 2025. This series of changes not only makes Ethereum safer but also makes large-scale applications of Web3 easier. Let's wait and see!
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