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Pectra upgrade, explained

Ethereum’s Pectra upgrade combines two separate upgrades: the Prague upgrade and the Electra upgrade.

The Prague upgrade is focused on changes to the network’s execution layer, with the Electra upgrade impacting the consensus layer. These upgrades, when combined, are collectively referred to as the “Pectra” upgrade.

The Pectra upgrade will follow “Dencun,” an amalgamation of the Deneb and Cancun upgrades, which occurred in March 2024. Dencun was technically an Ethereum hard fork designed to lower transaction fees for layer-2 solutions and improve Ethereum scalability. 

Pectra is a new milestone on Ethereum’s development roadmap. Ethereum developer Terence Tsao shared that the Pectra upgrade successfully went live on the Sepolia test network on March 5 at 7:29 am UTC. This marks the completion of its second test phase, achieving a flawless proposal rate.

This success follows a setback last week on the Holesky test network, where a misconfiguration among validators caused a chain split, briefly disrupting the network. Tsao responded to questions about these issues, explaining that it could take at least 18 more days to resolve the Holesky upgrade, as ongoing investigations are focused on problems related to “correlation penalties” and “validator balance drains.”

Test networks like Sepolia and Holesky allow developers to test new upgrades in a controlled environment before applying them to Ethereum’s main network, ensuring that any potential issues are addressed in advance. With the Sepolia test phase complete, Ethereum moves one step closer to deploying Pectra on the mainnet, although Holesky still requires further work to resolve the existing issues.

Ethereum Pectra’s two-stage rollout, explained

The Pectra upgrade for Ethereum introduces crucial improvements, including enhanced scalability and the ability to pay gas fees with stablecoins, with further advancements expected by 2026.

Phase 1: Scheduled for mid-March 2025, this phase includes:

• Doubling layer-2 blob capacity: Increasing the capacity from three to six blobs to reduce transaction fees and network congestion.
• Account abstraction: Allowing gas fees to be paid using stablecoins like USDC (USDC) and Dai (DAI), offering more flexibility to users.
• Increasing validator staking limits: Raising the maximum staking limit from 32 Ether (ETH) to 2,048 ETH to simplify large-scale validator operations.

Phase 2: Expected in late 2025 or early 2026, this phase will introduce:

• Verkle trees: A new data structure combining Vector Commitments and Merkle Trees to enhance data storage efficiency and support the transition toward stateless Ethereum clients.
• Peer data availability sampling (PeerDAS): A system that improves scalability by enabling nodes to verify transaction data without storing the entire data set.

Key highlights of the Ethereum Pectra upgrade

Pectra brings scalability, reduced fees, enhanced security and smart accounts to Ethereum, paving the way for more efficient transactions and future innovations.

• Improved scalability: Pectra brings new mechanisms developed to grow the network’s transaction capacity. In simple terms, this allows Ethereum to execute a higher number of transactions per second. This is an important step to support the rapid increase in decentralized applications (DApps) and participants on the network. 
• Reduced transaction fees: Gas fees should decrease thanks to the optimization of data storage and processing. Transactions will become cheaper for users and DApps to encourage further adoption of the Ethereum blockchain.
• Smart accounts: One of the most innovative improvements is the introduction of smart accounts. This makes Ethereum accounts and wallets more flexible. Previously, a user account could only make simple transactions. Smart accounts enable users to execute several transactions simultaneously. It’s a step that is predicted to unlock future possibilities and innovations. 
• Enhanced security: Within the upgrades, there are advanced cryptographic techniques that are designed to deliver more security for user data and smart contracts.

Ethereum Improvement Proposals (EIPs) included in the Pectra update

The Ethereum Pectra upgrade is the next major update to the Ethereum network, combining changes to both the execution layer (Prague) and the consensus layer (Electra)​. Pectra introduces 11 key Ethereum Improvement Proposals (EIPs) that enhance scalability, staking flexibility and user experience​.

Let’s understand what these EIPs are:

1. EIP-7251 (increase the staking limit): This will raise the maximum validator staking balance from 32 ETH to 2,048 ETH. However, validators still need 32 ETH to start but can now earn rewards on up to 2,048 ETH in one validator instead of being capped at 32. If you’re staking ETH, this gives you more flexibility. For example, someone with 40 ETH can stake it all under one validator and earn rewards on the full amount, whereas before, only 32 ETH would count, and the extra 8 ETH would be idle (you’d have needed 64 ETH to run two validators)​. This makes staking more accessible to those who have slightly over 32 ETH.
2. EIP-7691 (more data for L2s): It doubles the amount of blob data that can be included in each block. The target goes from three blobs to six blobs per block (and a maximum from six to nine)​. If you use layer-2 networks (like Optimistic or ZK-rollups on Ethereum), your transaction fees should get cheaper. More blobs per block means layer-2 rollups can fit more data on Ethereum at once, reducing congestion and lowering costs​.
3. EIP-7623 (higher call data costs for efficiency): Increases the gas cost of call data to push developers toward using blobs, a cheaper and more efficient way to store data. This encourages lower fees for layer-2 solutions while maintaining stability for regular Ethereum users. It’s a step toward optimizing Ethereum’s scalability.
4. EIP-7840 (flexible blob configuration): Allows Ethereum developers to adjust blob capacity in future upgrades without requiring major code changes. This ensures Ethereum remains adaptable, keeping fees predictable and performance optimized. It supports long-term scalability and helps manage network congestion more effectively.
5. EIP-7702 (smart accounts or temporary contract wallets): Lets regular wallets act like smart contracts during transactions, enabling gas fee sponsorship, passkey authentication and batch transactions. This improves the user experience by reducing friction when making transactions. It’s a major step toward simpler and more powerful wallets.
6. EIP-6110 (faster staking deposits): Speeds up validator activation by processing staking deposits directly on Ethereum’s execution layer. This reduces waiting times and makes staking more seamless. Validators can start earning rewards faster, improving efficiency and network responsiveness.
7. EIP-7002 (easier validator withdrawals): Allows validators to unstake directly via a simple Ethereum transaction instead of using the complex Beacon Chain process. This makes exiting staking much easier, giving stakers more flexibility and reducing reliance on technical knowledge.
8. EIP-7685 (better execution-consensus communication): Creates a standardized way for Ethereum’s execution and consensus layers to communicate. This improves the efficiency of validator actions like deposits and exits, making Ethereum’s staking system smoother and reducing delays.
9. EIP-2537 (faster cryptographic proofs): Adds a precompiled contract for advanced cryptographic operations (BLS signatures, zero-knowledge proofs). This lowers transaction costs for layer-2 solutions, rollups and crosschain bridges, making Ethereum cheaper and more efficient for developers building secure applications.
10. EIP-2935 (extended block history): Keeps up to 27 hours of historical block hashes onchain instead of just 51 minutes. This improves smart contracts that rely on past data, helping rollups, randomness apps and crosschain bridges function more reliably.
11. EIP-7549 (more efficient validator voting): Optimizes how Ethereum validators submit votes (attestations), making consensus faster and less resource-intensive. This keeps Ethereum’s staking system scalable and efficient as more validators join the network.

What are Ethereum Improvement Proposals (EIPs)?

EIPs are a critical part of Ethereum’s development process and are how Ethereum network upgrades are achieved. 

An EIP is a proposal or standard that details potential new features, improvements or processes for the Ethereum blockchain network. They contain technical specifications for proposed changes and, according to Ethereum.org, serve as a “source of truth” for the community. 

Ethereum network upgrades are proposed to the Ethereum development community and discussed and developed through the EIP process. Anyone within the community can create an EIP, and the author is responsible for reaching an agreement with the Ethereum development community and documenting any contrasting opinions. 

EIP authors are usually developers. EIPs enable changes to Ethereum and are proposed, debated and, if successful, adopted. Ethereum network upgrades like Dencun and Pectra consist of a set of EIPs that, once finalized, must be implemented by each Ethereum client on the blockchain’s network. 

Did you know? The Merkle-Patricia trie gets its name because it merges two data structures — Merkle trees and Patricia tries — to efficiently store and verify blockchain state data. The Patricia trie organizes key-value pairs, while the Merkle tree adds cryptographic proof, ensuring data integrity and secure lookups.

Next to watch: Ethereum’s Verkle trees implementation

Ethereum’s post-merge roadmap includes the “Verge” stage, which will introduce Verkle trees to improve data storage efficiency, lower hardware requirements, and enhance the user experience with faster sync times and smaller proof sizes.

Ethereum’s post-Merge roadmap is part of what Buterin outlines as a five-step process to improve the smart contract blockchain after Ethereum moved to a proof-of-stake (PoS) consensus mechanism in September 2022. The five stages are Merge, Surge, Verge, Purge and Splurge. 

However, the roadmap was later updated to include a sixth stage called “The Scourge.” In November 2022, Vitalik added The Scourge to address maximal extractable value (MEV) and censorship resistance​.

After Pectra, the next upgrade will likely include the highly anticipated Verkle trees, a new state data structure that will replace the current Merkle-Patricia trie, drastically improving data storage and proof efficiency. By moving all state data to a Verkle structure, Ethereum will be able to store and prove state data much more efficiently.

Verkle trees are part of Ethereum’s post-Merge roadmap and promise smaller proof sizes and lower hardware requirements for nodes. In a post on X, Vitalik Buterin noted that Verkle tree functionality would allow staking nodes to run with “near-zero hard disk space and sync nearly instantly” to improve UX and user-facing light clients. 

Verkle trees are in development as part of the Verge stage. In fact, the upgrade after Pectra is already nicknamed “Fusaka” (a combination of star Fulu and Devcon city Osaka), and it is reserved for implementing Verkle trees in Ethereum’s state storage.