Key points:

  • The Ethereum Pectra update, which will start in 2025, should make the Ethereum network faster, more scalable and easier to use.

  • Key changes include the ability to pay gas fees with different tokens, speed up smart contracts, and improve staking rewards for validators.

  • Long-term benefits include better scalability and lower costs, and features like Werkla trees and PeerDAS support Ethereum's growth and usability.

What is the Ethereum Pectra update?

Ethereum Pectra is an upgrade (hard fork) that aims to make Ethereum faster, more scalable, and easier to use for both regular users and blockchain developers. Expected to be rolled out in two phases starting in 2025, Ethereum Pectra is one of the most significant improvements to the Ethereum network in years.

Pectra is actually two updates that were originally planned separately: Prague and Electra. They were combined into one to simplify the work.

Why is Ethereum being updated?

Ethereum has been steadily improving since its inception, with many important updates such as "The Merge” in 2022 (during which Ethereum switched to Proof of Stake) and the "Cancun" update in 2024.

However, Ethereum still faces challenges, especially related to transaction fees, scalability, and how difficult it can be for new users. The Pectra update is designed to address these issues.

Key features of the Pectra update

Let's take a look at some of the biggest changes coming with the Pectra update:

1. Account abstraction

Currently, Ethereum users are required to hold a small amount of ether (ETH) in their wallets to pay for gas fees. These fees are transaction costs that you have to pay every time you make a transfer or interact with a decentralized application (dApp). For example, if you send someone tokens or trade NFTs, you will have to use ETH to cover these costs.

With the Pectra update, Ethereum will use a concept called account abstraction to improve the user experience. One of the benefits of account abstraction is that you don’t have to hold ETH just to pay gas fees. Instead, you can pay with other tokens like USDC or DAI, making it more convenient to use. The update will also allow third-party services to sponsor your gas fees, which means that in some cases you will be able to pay little or no fees at all.

2. Efficiency of smart contracts

Thanks to Ethereum Improvement Proposals (EIP) such as EIP-7692, the Ethereum Virtual Machine (EVM) will become more efficient, accelerating the execution of smart contracts. This change benefits both developers and users by reducing the cost and complexity of deploying smart contracts.

3. Improvements for validators

You may have heard that Ethereum operates on a decentralized system, where “validators” help verify transactions and keep the network secure. Validators are required to stake (lock) 32 ETH for participation, and in return they receive rewards. But any ETH above 32 just sits there and doesn’t earn any additional rewards. This isn’t very efficient.

Pectra will introduce flexible staking (EIP-7002) and increase the validator staking limit from 32 to 2048 ETH (EIP-7251). This change will make the system more flexible and efficient, especially for individuals or companies managing large amounts of ETH.

Additionally, Pectra will enable “validator consolidation,” meaning that large operations like Lido that stake ETH on behalf of a large number of users will need to run fewer validator nodes. This could reduce the load on the Ethereum network, making it faster and less resource-intensive.

4. Werkla Trees for Better Data Management

One of the technical improvements to Pectra is the introduction of Verkle Trees, which will allow nodes to store less blockchain data. This may sound complicated, but it’s an update that will make the Ethereum network faster and more scalable by improving the way data is stored and verified.

In other words, Werkla trees are a new way of organizing data that is more efficient than the one Ethereum currently uses. They help reduce the amount of memory required and speed up transaction processing. This means that Ethereum is likely to become faster and cheaper in the long run.

5. Level 2 and PeerDAS solutions

Ethereum Level 2 (L2) blockchains, such as Arbitrum and Optimism, are designed to handle large numbers of transactions outside of the Ethereum mainnet. This helps reduce congestion and lowers transaction costs (gas fees).

Pectra will improve these Layer 2 solutions by introducing Peer Data Availability Sampling (PeerDAS), a technology that makes data processing easier for these L2 networks. In essence, PeerDAS will help make Layer 2 even cheaper and faster, which is great news for anyone using Ethereum-based applications or doing a lot of transactions.

Why is the Pectra update divided into two parts?

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

  • Part One (Early 2025): The first phase will focus on immediate improvements such as account abstraction and validator updates. These changes will make Ethereum more user-friendly and improve staking rewards.

  • Part Two (expected in 2026). Part Two will bring more technical improvements, such as the EVM Object Format (EOF), which will make smart contracts more efficient, and PeerDAS, which will enhance the scalability of Level 2.

How will the Ethereum Pectra update affect you?

  • Regular users. One of the biggest benefits is that you will no longer need to store ETH specifically to pay gas fees. You will be able to use other tokens to cover fees, which will make it easier to interact with dApps and Ethereum services. In addition, improvements to validators should make the network faster and more secure.

  • Validators and stakers. If you are staking ETH or are a validator, the update will allow you to manage large amounts of ETH more efficiently. You will receive rewards for any amount over 32 ETH, which was previously not possible. Validator consolidation will also simplify the management of your staking operations and reduce the load on the Ethereum network.

  • Developers. Pectra is improving the Ethereum Virtual Machine (EVM), the environment in which smart contracts run. These changes will make writing and deploying contracts faster and cheaper, which is great for developers building decentralized applications.

Long-term benefits of Ethereum Pectra

While some improvements will be noticeable right away, the Pectra update is more focused on laying the foundation for Ethereum’s long-term growth. By making the network more scalable and efficient, Pectra helps prepare Ethereum for a future where even more people and businesses will use it.

The introduction of Werkla trees and improvements to layer 2 solutions mean that Ethereum will be able to process more transactions with lower costs, which is important as the network continues to grow.

Results

The Ethereum Pectra update is a huge step towards making Ethereum faster, cheaper, and easier to use. By splitting the update into two parts, the developers are ensuring that each phase brings significant improvements without overwhelming the network. Whether you are a regular user, validator, or developer, the Pectra update should deliver new features that will improve your Ethereum experience.

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