Key points

  • The Ethereum Pectra upgrade is planned to officially launch in 2025 and aims to comprehensively enhance the speed, scalability, and user convenience of the Ethereum network.

  • Key improvements include: supporting users to pay gas fees with other tokens, speeding up smart contract execution, and increasing staking rewards for validators.

  • In the long term, this upgrade will improve the network's scalability and lower costs while further promoting the development and adoption of the Ethereum ecosystem through features like Verkle trees and PeerDAS.

Understanding the Ethereum Pectra upgrade in one article

The Ethereum Pectra upgrade (hard fork) aims to comprehensively enhance Ethereum's speed, scalability, and convenience, providing a better user experience for general users and blockchain developers. This significant upgrade is expected to officially launch in 2025 and will be implemented in two phases, making it one of the most important improvements to the Ethereum network in recent years.

Pectra actually integrates the Prague and Electra upgrades, which were originally planned to be carried out separately. To simplify the process and ensure smooth progress, these two upgrades have been combined.

Why does Ethereum need to upgrade?

Since the inception of Ethereum, its network has continuously optimized, completing several significant upgrades, such as the Merge upgrade in 2022 (successfully transitioning to Proof of Stake) and the Cancun upgrade in 2024.

Nevertheless, Ethereum still faces many challenges, such as high transaction fees, insufficient scalability, and complexity for new users. The Pectra upgrade is a solution targeting these pain points.

Main features of the Pectra upgrade

Let's take a look at some of the main changes brought by the Pectra upgrade:

1. Account abstraction

Currently, Ethereum users need to hold a certain amount of Ether (ETH) in their wallets to pay gas fees. Gas fees are the transaction costs you incur when making transfers or interacting with decentralized applications (DApp). For instance, when sending tokens or trading NFTs, you must use ETH to pay these fees.

After the Pectra upgrade is completed, Ethereum will introduce the concept of account abstraction, significantly enhancing user experience. With account abstraction, users will no longer need to hold ETH specifically to pay gas fees but can choose to pay with other tokens like USDC or DAI, making operations more flexible and convenient. Additionally, this upgrade will allow third-party services to sponsor your gas fees, meaning that in certain cases, you may only need to pay a small fee or even none at all.

2. Smart contract efficiency

With the gradual implementation of Ethereum Improvement Proposals (such as EIP-7692), the Ethereum Virtual Machine (EVM) efficiency will be significantly improved, thus speeding up the execution of smart contracts. This improvement reduces the cost and complexity of deploying smart contracts, allowing both developers and users to benefit.

3. Optimizations for validators

You may already know that Ethereum operates on a decentralized system, where validators are responsible for confirming transactions and maintaining network security. Validators need to stake (lock) at least 32 ETH to participate and earn corresponding rewards. However, amounts exceeding 32 ETH do not provide additional benefits and remain idle, causing inefficiencies.

This Pectra upgrade will introduce a flexible staking withdrawal mechanism (EIP-7002) while raising the validator's staking limit from 32 ETH to 2048 ETH (EIP-7251). This improvement will significantly enhance the system's flexibility and efficiency, especially for users and businesses managing a large amount of ETH.

Additionally, the Pectra upgrade will support 'validator consolidation', allowing large operators like Lido, who stake ETH for numerous users, to reduce the number of validator nodes, thereby alleviating the operational pressure on the Ethereum network, further enhancing network speed and reducing resource consumption.

4. Data management optimized through Verkle trees

The Pectra upgrade brings an important technological improvement - the introduction of Verkle trees, allowing nodes to store less blockchain data. While this may sound complex, Verkle trees optimize the way data is stored and verified, making the Ethereum network faster and more scalable.

In other words, Verkle trees represent a new and more efficient data organization method compared to the technology currently used by Ethereum, helping to reduce storage requirements and accelerate transaction processing. In the long term, this is expected to further enhance network efficiency and lower costs.

5. Layer 2 solutions and PeerDAS

Ethereum's Layer 2 (L2) solutions (such as Arbitrum and Optimism) aim to move a large number of transactions off the mainnet to relieve network congestion and lower transaction costs (gas fees).

The Pectra upgrade will introduce Peer Data Availability Sampling (PeerDAS) functionality, further optimizing these L2 solutions. PeerDAS technology can help L2 networks process data more easily, thereby reducing costs and improving processing speed. This is undoubtedly a significant benefit for users engaging with Ethereum-based apps or making numerous transactions.

Why is the Pectra upgrade implemented in two phases?

Ethereum Pectra upgrade was initially planned to be completed in one go, but the development team found it too complex and risky to implement all features simultaneously. Therefore, they decided to divide the upgrade into two phases.

  • Phase one (early 2025): Focus on direct improvements related to account abstraction and validators. These improvements will make Ethereum more user-friendly while enhancing staking rewards.

  • Phase two (expected in 2026): Introduce more technological optimizations, such as the EVM Object Format (EOF) aimed at enhancing smart contract efficiency, and further enhancing Layer 2 scalability with PeerDAS technology.

What impacts will the Ethereum Pectra upgrade bring?

  • General users: One of the biggest benefits is that you no longer need to hold ETH to pay gas fees. Now, you can pay with other tokens, making it easier to interact with Ethereum DApps and services. Additionally, the optimization of the validator mechanism will make the network more efficient and secure.

  • Validators and stakers: If you are a user staking ETH or running a validator node, the upgrade will enable you to manage a large amount of ETH more efficiently. For amounts exceeding 32 ETH, you will be able to receive additional rewards, which was not possible before. Validator consolidation will also simplify your staking management and reduce the burden on the Ethereum network.

  • Developers: The Pectra upgrade optimizes the execution environment for smart contracts - Ethereum Virtual Machine (EVM). These improvements will make contract writing and deployment faster and more cost-effective, greatly benefiting developers building decentralized applications.

Long-term advantages of Ethereum Pectra

While some improvements will have immediate effects, the main goal of the Pectra upgrade is to lay a solid foundation for the long-term development of Ethereum. By enhancing the network's scalability and efficiency, Pectra is preparing Ethereum for the future influx of more users and businesses.

The introduction of Verkle trees and the optimization of Layer 2 solutions will enable Ethereum to handle more transactions at lower costs, which is crucial for the network's sustainable development.

Conclusion

The Pectra upgrade is a significant step for Ethereum towards a more efficient, economical, and user-friendly experience. To avoid overloading the network, the development team has divided this upgrade into two phases, ensuring substantial improvements in each phase. Whether you are a general user, a validator, or a developer, the Pectra upgrade will bring new features and improve your Ethereum experience.

Further Reading

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