Pectra upgrade: improving Ethereum’s efficiency

Pectra upgrade: improving Ethereum’s efficiency

Mar 10, 2025
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Implementing 11 Ethereum Improvement Proposals (EIPs), the highly anticipated Pectra Upgrade was rolled out on its final testnet, Sepolia, at 7:29 am UTC on March 5. Although it was announced to go live on April 8, some technical issues required Ethereum’s core developers to delay the release, which is business as usual for networks as big as Ethereum, with 7.2 million monthly active users.

Ethereum’s Pectra upgrade – now expected to go live later this year – has gathered significant community support as it aims to improve:

  • Staking: Smart contracts (e.g., staking pools like Lido) can programmatically trigger validator exits and withdrawals. This enables yield-optimization strategies (e.g., auto-restaking profits) and smoother exits for liquid staking tokens, which reduce reliance on manual processes and improve reliability. Another upgrade feature is aimed at streamlining Ethereum validator deposits by embedding them directly into blocks, slashing activation time from ~12 hours to 13 minutes, thereby accelerating staking participation.
  • Network scalability: optimizing transaction processing by increasing the blob target from 3 to 6, effectively doubling the network’s capacity to handle data on Ethereum’s Layer 2 (L2) solutions such as Polygon, Optimism, and Arbitrum. This expansion reduces congestion and lowers transaction fees on L2 solutions, leading to more efficient and cost-effective operations.
  • Blockchain efficiency: raising the maximum balance for validators from 32 ETH to 2,048 ETH, allowing validators to stake larger amounts more efficiently. This would streamline operations for large stakeholders and reduce infrastructure costs as it addresses the issue that validators had to split stakes across multiple nodes, while reducing network overhead, which could lead to less congestion.
  • User-friendliness: allowing externally owned accounts to be temporarily converted into smart contract accounts. This enables functions like transaction bundling and paying gas fees with alternative tokens.
  • Data verification: extends the availability of historical block hashes from 256 blocks (~1 hour) to 8,192 blocks (~1.5 days). This significantly enhances how smart contracts and oracles access past state data. Protocols like Lido and L2 rollups can use these extended hashes for on-chain validation, reducing their need for off-chain trust assumptions.

One of the most exciting features of the upgrade is the ability for users to pay gas fees with tokens other than ETH and enable social recovery, making Ethereum feel more like a modern fintech app. Additionally, improvements to staking—such as increasing the maximum stake per validator, reducing network overhead, and shortening activation times—make staking faster and more efficient. These changes are expected to boost the appeal of staking-enabled products by enhancing usability and increasing validator participation.

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