What’s the use of the Ethereum Pectra upgrade tomorrow?

Tomorrow (May 7), Ethereum is undergoing a major upgrade called Pectra, which simply means making ETH more user-friendly, cheaper, and more profitable!

1. Wallets have become 'smarter'

Previously, transferring funds felt like filling out a form with repeated authorizations. Now, wallets can automatically bundle operations and even help you 'advance' transaction fees, making DeFi as easy as using Alipay.

2. Interest on deposited coins may be higher

The upper limit for large holders to deposit ETH has been raised from 32 to 2048, making it easier for institutions to enter. Ordinary people can also pool funds through platforms to deposit coins, increasing competition for interest rates and potentially raising returns.

3. Transaction fees are cheaper

After Layer 2 scaling, transaction fees are expected to decrease by 40%-60%, saving NFT and DeFi players a considerable amount. However, in the short term, gas fees may fluctuate due to a surge in transactions.

4. Impact on coin prices

Historically, ETH tends to rise before upgrades (for instance, it increased by 127% before the merge upgrade in 2022), but may pull back afterward. In the long run, if the technology is successfully implemented, ETH may become scarcer, driving prices up.

Risk Warning

If a bug arises after the upgrade, it could trigger sell-offs; other chains (like Solana) are also competing for users, so don’t just bet on ETH.

Summary: This upgrade = making ETH more user-friendly + encouraging large holders to deposit more + making the market more scarce, with potential short-term volatility but positive long-term implications.