Ethereum the most valuable smart contract supporting blockchain( by market cap and TVL) is poised for another upgrade.
This will be the next upgrade following the Dencun upgrade of March 2024 which was preceded by the Shappela upgrade of April 2023.
Unlike the Sheppela upgrade which brought staking withdrawals to the execution layer or the Dencun upgrade which lowered transaction fees and improved scalability, the Pectra upgrade focuses on user-centric improvements.
The Pectra upgrade will revolutionise crypto wallets and enhance user experience (UX) by extending smart contract-like capabilities to standard crypto wallets (EIP-7702) and also streamlining staking procedures for validators (EIP-7251).
This upgrade is the next step in Ethereum’s evolution, let’s delve deeper
Unveiling the Pectra Upgrade
The name ‘Pectra,’ following what is somewhat becoming Ethereum’s naming convention, originates from the simultaneous implementation of two upgrades across different layers of the Ethereum blockchain:
- Prague: This upgrade focuses on the execution layer, responsible for enforcing protocol rules.
- Electra: This upgrade pertains to the consensus layer, ensuring block validation.
Together, these upgrades culminate in ‘Pectra,’ which introduces several ambitious improvements to Ethereum, enhancing its flexibility and optimization.
Pectra will incorporate multiple Ethereum Improvement Proposals (EIPs), aimed at enhancing user experience, improving staking efficiency, and bolstering the network’s functionality, security, and scalability.
Let’s quickly highlight the meaning of ‘EIPs’.
What are Ethereum Improvement Proposals (EIPs)?
Ethereum Improvement Proposals (EIPs) are proposals or standards that detail potential new features, improvements, or modifications for the Ethereum blockchain network. They include technical specifications for the proposed changes. Proposed upgrades to the Ethereum network are presented to the Ethereum development community and discussed and developed through the EIP process. Think of EIPs as bills or proposals brought up in senates or parliaments that, if favoured by most members, become policies or laws. While anyone within the community can create an EIP, they are typically authored by developers.
Delving Into the Pectra Upgrade EIPs
The Pectra upgrades comes with the implementation of 20+( tentative) EIPs in total, let’s quickly highlight some of the key EIPs.
EIP-7702:
EIP-7702 replaced EIP-3074, which had critical security concerns. Among the developers who proposed EIP-7702 is Vitalik Buterin, the co-founder of Ethereum.
This EIP aims to enhance account abstraction by enabling regular users’ Ethereum accounts, known as Externally Owned Accounts (EOA), to possess smart contract wallet capabilities.
See: What Is Account Abstraction In Crypto
This enhancement will unlock additional functionalities for EOAs, such as transaction bundling, which allows multiple transactions to be grouped for efficiency and cost savings, and sponsored transactions, where a third party covers the transaction fees. These improvements expand opportunities/possibilities for decentralized finance (DeFi) protocols and other applications.
EIP-7251
Also referred to as Maxeb, this EIP increases the maximum effective balance (maxeb) for Ethereum validators from 32 ETH to 2048 ETH, which reduces the total number of validators needed and simplifies the network’s computational load.
To clarify, while 32 ETH is sufficient to stake and start running a node, the maximum amount users can stake will now be increased to 2048 ETH.
Previously, the limit of 32 ETH posed challenges for larger-scale staking entities, who preferred to stake more. Instead of running multiple nodes by staking 32 ETH multiple times, they can now stake up to 2048 ETH and validate from a single node.
By allowing individual validators to maintain larger balances, they can consolidate their operations more effectively and accumulate rewards without compromising the integrity of the Ethereum network.
EIP-7002
This EIP enables validators to withdraw or exit via the execution layer facilitating more flexible, trustless options around the staking process.
EIP-7594
This further enhances the transaction processing and scalability of L2s by introducing Peer Data Availability Sampling (PeerDAS)
EIP- 7692 (EOF of EIPs)
EOF stands for EVM Object Format and essentially introduces a new version of the Ethereum Virtual Machine. So they are EIPs that upgrades the EVM.
See: What is an Ethereum Virtual Machine (EVM)?
EIP-7692 contains 11 EOF EIPs all aimed at improving smart contract security and developers experience for the Ethereum Virtual Machine (EVM) on layer 1 and layer 2.
These new optimisations to the EVM will indirectly benefit end users by enhancing overall network performance and efficiency.
Closing Thoughts
The Pectra uprgade is set to go live sometime in Q1 2025 aiding Ethereum to remain at the forefront of blockchain innovation and poise for mass adoption as the networks’ usability( smart user accounts) , scalability and security will all be improved.
[Author’s Note: This article does not represent financial advice, everything written here is strictly for educational and informational purposes. Please do your own research before investing.]
Author: Godwin Okhaifo
Also Read: Everything You Need To Know About Multisig Wallets
