Compiled by: Bai Hua Blockchain

The Pectra upgrade of Ethereum is scheduled to be launched in March 2025, which combines the originally planned separate Prague and Electra upgrades to achieve better integration and enhance scalability, efficiency and usability.

The Pectra upgrade introduces account abstraction to enable flexible Gas payment and smart contract optimization.

What is the Ethereum Pectra upgrade?

The Ethereum Pectra upgrade enhances the scalability, efficiency and staking flexibility of the network. Pectra expands the storage capacity of Layer-2 solutions while reducing fees.

One of the most user-friendly improvements of Pectra is flexible Gas payment. In Ethereum, "Gas" refers to the transaction fees used to compensate validators for maintaining network security. Through account abstraction, Pectra allows users to pay these fees using ERC-20 Tokens (such as USDC) instead of being limited to ETH. Account abstraction simplifies Ethereum transactions by making wallet functions more like smart contracts, giving users more control over transaction execution.

The Pectra upgrade also introduces Peer Data Availability Sampling (PeerDAS). PeerDAS enhances the scalability of Ethereum by allowing nodes to verify data without fully storing transaction data, making the network more efficient.

Another improvement is Verkle Trees, a new data structure that combines vector commitments and Merkle Trees to provide a more efficient data storage upgrade for Ethereum. Verkle Trees optimize information storage and verification, significantly reducing the amount of data validators need to maintain, while allowing fast and secure access to network information.

When will the Ethereum Pectra upgrade occur?

The Ethereum Pectra upgrade is expected to take place in mid-March 2025 and will be implemented in two phases. The first phase will introduce key improvements, such as increasing the Blob capacity of Layer-2 from 3 to 6 to reduce congestion and fees, while enabling account abstraction to allow the use of stablecoins like Dai and USDC to pay Gas fees.

The second phase is expected to be implemented by the end of 2025 or early 2026, and will achieve advanced optimizations, including PeerDAS and Verkle Trees, to improve data storage and network efficiency.

The previous major Ethereum upgrade, Dencun, was carried out on March 13, 2024. It introduced Proto-Danksharding, which reduced the transaction costs of Layer-2 blockchains by using temporary data called "Blobs" that do not rely on permanent on-chain storage, reducing network congestion, improving scalability, and laying the foundation for upgrades like Pectra.

How does the Pectra upgrade work?

The key features of Pectra include:

Account Abstraction: This feature supports the use of various Tokens (such as USDC, Dai) to pay Gas fees and allows third-party fee sponsorship.

Smart Contract Optimization (EIP-7692): Improving the efficiency of the Ethereum Virtual Machine (EVM).

Validator Upgrades: EIP-7002: Enabling flexible staking withdrawals.

EIP-7251: Increasing the staking limit for validators from 32 ETH to 2048 ETH.

Data Storage Enhancements: Verkle Trees: Reducing storage requirements and improving transaction processing.

PeerDAS: Enhancing Layer-2 scalability and reducing network congestion.

What Ethereum Improvement Proposals (EIPs) are included in the Pectra upgrade?

The Pectra upgrade introduces several Ethereum Improvement Proposals (EIPs) to enhance wallet usability, staking, and scalability.

EIP-7702: Temporarily treating Externally Owned Accounts (EOAs) as smart contracts to simplify transactions, replacing the now-deprecated EIP-3074.

EIP-7251: Increasing the maximum staking amount for each validator from 32 ETH to 2048 ETH to reduce network congestion.

EIP-7002: Improving the validator exit process to increase the efficiency of staking service providers.

EIP-7742: Enhancing Layer-2 scalability by doubling transaction throughput, increasing Blob capacity, and reducing fees.

EIP-2537: Introducing cryptographic efficiency improvements.

EIP-2935: Providing a mechanism for on-chain storage of historical block hashes.

EIP-6110: Simplifying the validator deposit process.

How will the Pectra upgrade impact users?

The Pectra upgrade is expected to benefit Ethereum users in several ways, including batch transaction processing, new recovery options, and new wallet types.

Once the Pectra upgrade is live, Ethereum users may see lower or even zero Gas fees, as third-party services and decentralized applications (dApps) will have the ability to sponsor transaction fees, potentially eliminating transaction costs in some cases.

Pectra also introduces new wallet features to improve the usability and accessibility of Ethereum, including:

Batch transaction processing: Allowing multiple transactions to be bundled into one, reducing costs and improving efficiency.

Social recovery: Providing a safety net for lost private keys, allowing wallet access to be restored with the help of trusted contacts.

Native multi-signature wallets: Enhancing security by requiring multiple approvals to execute transactions, protecting funds from unauthorized access.

Potential challenges of the Pectra upgrade

Ethereum developers expect Pectra to be successfully launched, but there are still key risks. According to a report published by Obol and Liquid Collective in June 2024, client diversity is an issue, as bugs in mainstream clients could disrupt network stability. Operator centralization may also increase the risk of slashing penalties due to staking being concentrated in a few entities. Reliance on cloud services like AWS and Hetzner also brings risks of downtime and security vulnerabilities, affecting validator uptime and network resilience.

Another challenge is that changes to wallet verification in the Pectra upgrade may expose outdated legacy protocols to vulnerabilities. Additionally, increasing the staking limit may encourage centralization, concentrating power in the hands of larger participants and attracting regulatory scrutiny. Slow adoption of distributed validator technology (which can mitigate single points of failure and reduce centralization risks) may weaken network resilience.

Early issues on the testnet

These challenges became apparent in February 2025 when the Pectra upgrade was activated on the Ethereum Holesky testnet but failed to achieve finality (the state where transactions are confirmed and permanently recorded on the blockchain). While a setback, Georgios Konstantopoulos, a general partner and chief technology officer at the crypto investment firm Paradigm, stated that the purpose of the testnet "is to find problems".

Ethereum developers chose to delay the Pectra release to test the upgrade on a "shadow fork" of the Holesky testnet, a temporary copy that allowed testing to continue while waiting for the Holesky testnet to regain finality, which was ultimately achieved on March 10, more than two weeks after the initial activation.

This is not the first time an Ethereum upgrade has failed to achieve finality on a testnet; in March 2024, the Dencun upgrade encountered similar issues when it launched on the Goerli testnet.

The next preparatory work will start on March 17 with a testnet specifically designed for the Pectra upgrade, codenamed Hoodi. If all goes well, developers expect Pectra to be launched on the mainnet on April 25.

The future of Ethereum after Pectra

The Pectra upgrade is an important step in Ethereum's roadmap, aligning with its long-term vision for scalability, security, and decentralization. As part of Ethereum's transition to a more efficient network, Pectra lays the foundation for future updates.

In January 2025, Ethereum co-founder Vitalik Buterin addressed concerns about ETH prices and the impact of Layer-2 scaling solutions on the network's economy. Buterin emphasized that Layer-2 networks need to support the value of ETH through burning a portion of fees or staking them for community benefit.

"We should be clear-eyed about the economics of ETH," Buterin wrote. "We need to ensure that ETH continues to appreciate in value even in a Layer-2-dominant world, and ideally solve the problem of value accrual in multiple modes."

Buterin also called for standardizing cross-chain functionality, enhancing interoperability, and prioritizing security to prevent censorship on Layer-2 chains. He likened this moment to a "wartime mode," underscoring his determination to confront these challenges and drive Ethereum's development.

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Summary

The Pectra upgrade is another major update to Ethereum since the "Merge" in 2022, scheduled to go live in March 2025. It significantly improves network performance and user experience through technologies such as account abstraction and Verkle Trees, while introducing flexible Gas payment and higher staking limits. However, the upgrade also faces challenges such as client diversity and centralization risks. This article will deeply analyze the technical highlights and potential issues of the Pectra upgrade, taking you to explore a key step in Ethereum's future development.

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