Major Changes Coming with Ethereum’s Update, Pectra
This week, Ethereum’s core developers decided to split the network’s next major update, Pectra, into at least two installments, with the first update shipping on or around February 2025.
For both blockchain developers and everyday Ethereum users, the latest Ethereum updates (including Dencun, which launched in March, and Shapella, which launched in 2023) heralded significant changes.
Pectra: Stage One
During a call on Thursday, Ethereum’s core developers decided that Pectra had too many items on the wish list to release all at once, which could make the upgrade too complicated. Instead, the decision was made to split the upgrade into at least two parts, with the first slated for early next year.
There are already a number of proposals that have been given the green light for inclusion in this first update, and many of these will have a noticeable impact on Ethereum users. For one, it ends the cumbersome practice of having to hold small amounts of ETH in order to pay for gasoline in the backbone and many Layer 2 networks.
Currently, regardless of the token being transferred, gas fees on Ethereum, Base, Arbitrum, Optimism and several other networks in the Ethereum ecosystem must be paid in ETH. A proposal included in the first part of Pectra, EIP-7702, will effectively end this requirement by allowing users to pay gas fees in other, more diverse cryptocurrency. The proposal, which introduces “account abstraction,” will allow users’ Ethereum wallets to behave more like smart contracts, meaning that third parties will be able to sponsor transactions and pay your gas fees on your behalf.
This, lead developer Marius van der Wijden explained to Decrypt, will mean users will soon be able to outsource their gas fees to services able to pay in, say, US dollars, meaning they won’t need to hold ETH to complete basic functions in Ethereum. “It’s a huge improvement to the user experience,” van der Wijden said.
Other Improvements
Another improvement that was introduced in the first part of Pectra, EIP-7251, will allow Ethereum participants to earn rewards for amounts of more than 32 ETH. Previously, validators could only collect performance if they deposited 32 ETH (just over $81,000) into the network.
No more ETH than that will produce extra income unless you deposit another full 32 ETH from another validator. For example, a user currently betting 40 ETH would receive no yield or voting power from those additional 8 ETH. “Basically, it was just a dead stake,” van der Wijden said, “but now it’s not.”
Participants will be able to earn a proportional return on any amount deposited over 32 ETH when the first Pectra segment ships early next year. This is made possible by a new feature that allows for validator consolidation. This means that if you are currently running multiple 32 ETH validators to maximize rewards and leverage, you can now consolidate them into a single validator with proportionally greater voting power and reward accrual.
On a macro scale, the ability to consolidate validators also means that large participants like Lido, Rocket Pool and Coinbase, which aggregate funds from thousands of different users, can now significantly reduce the number of nodes required to participate in the main Ethereum network. “This will significantly reduce the bandwidth requirements of the Ethereum network as a whole,” van der Wijden said.
Two other proposals in Pectra’s initial submission, EIP-6110 and EIP-7002, will also first enable fully automated, permissionless ETH participation pools. Currently, some elements related to the deposit and withdrawal of funds in services such as Rocket Pool still need to be managed manually.
By Audy Castaneda