The technical highlights for Ethereum in 2025 are the Pectra and Fusaka upgrades, with the Pectra upgrade set to launch on the mainnet on May 7th, expected at epoch height 364032. What do the Pectra and Fusaka upgrades mean for Ethereum? Here's an analysis from Binance Research; compiled by AIMan@Jinse Finance.
Ethereum's dominance is under threat. Solana and BNB Smart Chain are narrowing the gap in DEX trading volume and transaction fees. Factors contributing to this gap include slow transaction speeds, high costs, developer awareness, liquidity fragmentation, and reduced L1 value accumulation due to the rise of Layer 2.
Pectra and Fusaka upgrades aim to expand Layer 2. The upcoming Pectra and Fusaka upgrades are planned to launch on the mainnet on May 7th, 2025, and by the end of 2025, respectively. Notably, these code changes are not intended to strengthen ETH's status as a "super hard currency" or improve Ethereum's performance as a more censorship-resistant blockchain.
Pectra will focus on Proof of Stake, blob, and account abstraction improvements.
Staking: EIP-7251 will increase the maximum effective balance from 32 ETH to 2,048 ETH to address network pressure from the current scale of over 1 million validators.
Blob: EIP-7691 will increase the target and maximum blob capacity from 3 to 6 and 6 to 9, respectively, to publish more data to L1 while maintaining low costs.
Account Abstraction: EIP-7702 will transform external owned accounts (EOA) into smart contract wallets, benefiting from bundled transactions, gas sponsorship, social recovery, and other features.
Fusaka will focus on expanding Ethereum as a data availability layer and potentially upgrading the Ethereum Virtual Machine.
Path to Full Danksharding: PeerDAS, to be introduced in EIP-7594, will be a stepping stone to achieving full data availability sampling.
EVM Upgrade: Ethereum Object Format will bring a more structured contract creation method, reducing runtime overhead and improving developer experience and user security.
Investment in Layer 2 scalability is a double-edged sword. Concerns exist about Ethereum's competitiveness as a data availability layer in this vision and the sustainability of Ethereum asset value appreciation.
Competition in data availability is fierce. Ethereum with full Danksharding technology still lags behind Celestia, EigenDA, and NearDA in raw data throughput and cost efficiency. However, Ethereum remains the most secure blockchain, which could be a key consideration for data availability.
How to continuously accumulate ETH value remains an actively explored topic. Suggestions like repricing the blob market might prompt Layer 2 solutions to seek cheaper alternatives, while expecting Layer 2 to support ETH by charging a certain percentage of fees is too subjective. Rollup-based solutions offer the strongest support for value accumulation, but are currently not a priority on the roadmap.
