The Pectra upgrade, expected to be implemented on 7/5/2025, is the next major milestone after The Merge and Dencun. Combining two parts Prague (execution layer) and Electra (consensus layer), Pectra brings significant improvements in scalability, staking, security, and user experience.

I. Notable Upgrades

  • EIP-7251: Increase Staking Limit

    Increase limit from 32 to 2,048 ETH per validator → Reduces the number of nodes, increases staking efficiency, attracts institutions. However, this increases the risk of centralization (Lido currently accounts for 32%).

  • EIP-7702: Improve EOA Wallet

    Transform regular wallets into smart wallets:

    • Pay gas with stablecoins

    • Recover wallet without seed phrase

    • Batch transactions → Boost DeFi, L2.

  • EIP-7691: Increase Blob Capacity

  • Increase from 3 to 6 blobs (768KB) → Reduce L2 fees by ~20–30%, increase transactions, attract dApp & TVL (currently 45 billion USD)

  • EIP-6110 & EIP-7002: Simplify Staking

    • Activate validators faster (~45 minutes).

    • Allow staking withdrawals from the execution layer → Reduce dependence on Lido, support individual staking.

  • EIP-2537: Upgrade EVM

  • Support BLS12-381 → Reduce gas fees for smart contracts by 10–20%, optimized for ZK-rollups.

II. Reviewing Major Upgrades and Market Impact

  • The Merge (9/2022): Transition to PoS, activate staking → ETH and L2 surged but quickly corrected when news broke

  • Shapella (4/2023): Allows staking withdrawals → ETH increased by 15% in a month.

  • Dencun (3/2024): Reduce L2 fees → ETH increased by 20% in 2 months, L2 like Base and Arbitrum exploded.

→ Benefiting coin groups: Layer 2, DeFi, LSD, LSDfi, Ethereum ecosystem and all are subject to the effect of 'buy the rumor, sell the news'

III. Coin Groups That May Benefit

  • Layer 2 (L2)

    Reasons: EIP-7691 increases blob capacity → reduces L2 fees by ~20–30%, increases transactions. Similar effect as after Dencun.

  • Staking Derivatives (LSD)

    Reasons: EIP-7251 & EIP-6110/7002 increase the efficiency and flexibility of staking

  • DeFi Coins

    Reason: EIP-7702 supports gas with stablecoins, batch transactions → promotes DeFi

  • Ethereum Ecosystem & dApps

    Reason: EIP-2537 increases EVM performance, supports ZK-rollups, dApp, GameFi/NFT

IV. Bullish vs Bearish Arguments

Bearish:

  • Macroeconomic conditions are extremely poor

  • The technical analysis chart of the coin groups on is not looking good

  • BTC.D is still in an upward trend, expected to continue rising

  • Sell in May effect, market sentiment is quite bearish

  • ETH ETF is still being sold continuously, there is still no inflow of capital


Bullish:

  • Recently minted stablecoins continuously serve as a catalyst for a wave

  • Although the technical analysis chart has not confirmed, some of the above coin groups have been accumulated by whales

  • The macroeconomic market will not fluctuate too much in 90 days due to President Trump renegotiating tariffs

Conclusion:

Previously, with 3 upgrades, there had been no upgrade where ETH price did not increase. Is the current Pectra updates an exception when both the macroeconomic situation is very poor and ETH is lagging behind Solana?



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