- Ethereum’s Pectra upgrade, combining Prague and Electra, is set for May 7 this year.
- Pectra’s proposals aim to boost validator operations, staking rewards, and network performance.
- Account abstraction in Pectra simplifies gas fees and recovery for regular users.
Ethereum’s upcoming Pectra upgrade is already closer than ever. Meanwhile, this update, which is a combination of the Prague and Electra updates is set to make the network more efficient and scalable. While Metamask staking users won’t need to take any action, several Ethereum Improvement Proposals (EIPs) within Pectra are expected to bring many changes to the network.
Here are some of the things to expect and how they affect everyone on the Ethereum network.
Key Staking and Validator-Related Upgrades
As mentioned earlier, the Pectra upgrade is expected to bring in several EIPs. These proposals are aimed at improving validator operations. They will also improve staking rewards and improve the network’s performance as a whole. Some of the key EIPs in this upgrade include the EIP-7251, which is focused on increasing the maximum effective balance for validators.
The EIP-6110 and EIP-7002 on the other hand, are focused on faster validator deposits, as well as Execution layer-triggered validator exits respectively. Finally, the EIP-7549 is focused on improving attestation efficiency. Each of these changes are important for the network as a whole, and are expected to benefit individual stakers as well as staking pools.
What Changes with Pectra?
Currently, Ethereum validators have an effective balance cap of around 32 ETH. Any additional ETH beyond this limit does not earn staking rewards, making the Ethereum network less encouraging for large stakers. The EIP-7251 is the ultimate fix for this, and is expected to raise the cap to 2048 ETH. This will allow anyone to stake anywhere between 32 and 2048 ETH in a single validator.
Large stakers and staking pools can also consolidate multiple validators into one and reduce the operational overhead. For the network as a whole, fewer validators means that communication is smoother. In essence, the Ethereum network is likely to become more efficient over time.
The EIP-6110 is also aimed at reducing processing time from hours to mere minutes, in a process that makes validator activation nearly 48 hours faster. Staking pools like Lido can also use the EIP-7002 to give their DAO more control over validator exits. While this approach has its fair share of risks, Lido itself has plans to implement a dual-governance model to prevent the abuse of this feature.
What About $ETH And Its Investors?
The Pectra upgrade was initially scheduled for March of this year, but was delayed due to finality issues on the Holesky and Sepolia testnets. So far, however, this upgrade has been running smoothly on the Hoodi testnet.
Despite the initial issues, the Ethereum Holesky testnet has been up and running since early March. While most of the benefits of the Pectra upgrade is geared towards validators on the Ethereum network, the most noticeable change for regular users is the introduction of account abstraction. This feature will allow users to pay for gas or even transaction fees with multiple tokens (like stablecoins) asides from ETH.
The upgrade is also expected to improve wallet functionality for users, including the so called “social recovery,” for a more user-friendly restoration process for lost seed phrases.
So far, the price of Ethereum price hasn’t reacted strongly to this coming upgrade, and is down by around 5% over the last week, to a current price of $1,830.
