Ethereum’s Pectra Network Upgrade: What To Expect

Ethereum, the second-largest blockchain by market cap, will undergo a major network upgrade in March if preliminary tests on its test networks go as planned. The Pectra upgrade is set to improve user experience and scalability, among other improvements.

According to Ethereum Foundation’s Tim Beiko, test runs on the Holesky and Sepholia networks are scheduled, ensuring Pectra is ready for deployment.

The Holesky fork will take place on Feb. 24, followed by Sepholia on March 5. If all goes well, Ethereum developers will finalize a mainnet launch date on March 6 at their all-core developers (ACD) meeting. Ethereum’s Pectra hark fork is highly anticipated as it aims to fix some of the network’s main pain points: a challenging user experience for crypto newcomers and slower, more expensive transactions.

The Pectra upgrade combines Prague and Electra, which were initially planned to be released individually but merged for better integration and scalability. It includes eight Ethereum Improvement Proposals (EIPs).

Account Abstraction

EIP -7702 introduces account abstraction, enabling Externally Owned Accounts (EOAs) to execute smart contract code directly. With this feature, users will be able to pay transaction fees using various tokens, not just ETH, while developers will be able to incorporate transaction batching and sponsored gas fees.

EOAs initiate transactions, while smart contract wallets can only execute transactions in response.

“Pectra is another milestone for Ethereum,” said Wanchain CEO Temujin Louie in an interview. “Account abstraction removes a key barrier, while also strengthening security.”

Layer 2 Scalability

EIP-7742 increases the capacity for "blobs," which store transaction data. With more storage for Layer 2 rollups, Ethereum transactions will become cheaper and faster.

“By increasing available data space for Layer 2s, it helps prevent transaction costs from becoming too expensive. L2s store data in ‘blobs,’ and Pectra will double the number of blobs per block from three to six,” said Dom Harz, co-founder of Build on Bitcoin (BOB) in an interview.

Validator Improvements

EIP-7751 increases the limit on the number of ETH a validator can stake from 32 ETH to 2,048 ETH. This update allows large validators to scale and better manage their operations, and improves the process of setting up a new validator.

While the update enhances efficiency, it could concentrate staking power among fewer entities, altering Ethereum’s decentralization landscape.

EIP-7002 enhances the process of validator exits and withdrawals within the network, improving the user experience for staking providers. EIP-6110 improves the validator deposit process by replacing the voter mechanism currently used on the Consensus Layer. Instead, the validator deposit list will be supplied in a block and added to the execution layer.

"Not only does this upgrade bring major enhancements to Ethereum staking, but it also constitutes the most impactful change to the Consensus layer since the Merge,” said Luca Sorlini, Northstake Head of Product in an interview.

Additional Technical Enhancements

EIP-2537 implements a cryptographic primitive that boosts security within the network, while EIP-2935 provides a way to serve and store historical block hashes. This improved the overall efficiency of the Ethereum Virtual Machine (EVM).

While significant, the Ethereum ecosystem will have to wait and see the full effect of the upgrade, said

“Pectra is a step in the right direction. By increasing available data space for Layer 2s, it helps prevent transaction costs from becoming too expensive. L2s store data in ‘blobs’, and Pectra will double the number of blobs per block from 3 to 6. Think of it like a warehouse: doubling its size means you can store more stock, process more orders, reduce costs, and operate more efficiently,” said Dom Harz, co-founder of Build on Bitcoin (BOB).

Forward Outlook

The Pectra update’s multiple EIPs will impact each part of the Ethereum ecosystem at a time when the second-largest blockchain is feeling the pressure of increased competition and leadership challenges.

“The effects of the upgrade will ripple through the ecosystem, benefiting stakers, node operators, and DeFi protocols while fundamentally enhancing the efficiency and usability of the network,” Sorlini said.