As the world’s leading smart contract platform, Ethereum is continuously advancing its protocol layer through iterative upgrades. Following the Dencun upgrade in 2023, the Ethereum community plans to deploy the Pectra upgrade between late 2024 and early 2025. The testnet for the Sepolia Pectra upgrade was completed on March 5, 2025. This upgrade integrates improvements to both the execution layer (codenamed “Prague”) and the consensus layer (codenamed “Electra”), covering core areas such as account abstraction, staking mechanisms, and algorithm optimizations.

What is the Pectra Upgrade?

Pectra is a hard fork upgrade of the Ethereum protocol layer, with its name derived from the combination of the execution layer upgrade (Prague) and the consensus layer upgrade (Electra). This upgrade includes 19 formal proposals (EIPs) and 7 discussion proposals, focusing on the following areas:

1. Account System Reform: Expanding through temporary smart contract accounts and account abstraction to reduce user operation complexity.
2. Staking Efficiency Improvement: Optimizing validator limits and withdrawal processes to enhance efficiency.
3. Cryptographic Support Expansion: Introducing new precompiled contracts to improve the development efficiency of technologies such as zero-knowledge proofs.

Background of the Upgrade

The continuous upgrades of Ethereum stem from the contradiction between the scalability needs of its underlying protocol and the development of its ecosystem. The network has historically faced several challenges:

• Architectural Limitations: Ethereum’s account model is divided into external accounts (EOA) and contract accounts (CA). Ordinary users must manage private keys and gas fees through EOAs, leading to high operational thresholds and difficulties in executing batch transactions. Additionally, the current validator system has a single node staking limit of 32 ETH, requiring large staking institutions to deploy numerous validator nodes, increasing hardware costs and network load.

• Performance Bottlenecks: With the proliferation of Layer 2 scaling solutions, the Ethereum mainnet needs to handle more data availability (DA) requests. The existing data serialization format (RLP) and signature verification mechanisms limit block propagation speed, with a peak orphan block rate of 2.1%, severely impacting network stability.

• Developer Needs: New application scenarios (such as fully homomorphic encryption and privacy computing) require more efficient cryptographic primitives support. However, the existing EVM precompiled contracts only support a limited number of cryptographic algorithms, forcing developers to implement underlying computations themselves, increasing code complexity and security risks.

These challenges have prompted the Ethereum community to conduct systematic optimizations through the Pectra upgrade to maintain its core competitiveness as the “king of public chains.”

Main Functions of the Pectra Upgrade

Enhancing User Experience

The Pectra upgrade introduces a transitional solution for account abstraction (AA). EIP-3074 allows external accounts to delegate transaction control to relay contracts, enabling users to complete multi-step operations (e.g., transfer request → token swap → gas payment) with a single signature. As a result, users no longer need to hold ETH specifically to pay gas fees and can choose to pay with other tokens like USDC or DAI.

EIP-7702 further implements temporary smart account functionality, allowing ordinary wallets to execute smart contract logic within a single transaction, such as setting limit orders or automatic reinvestment strategies. Data shows that such improvements can reduce DeFi users’ operational steps by 50% and lower gas costs by 18-32%.

Optimizing Staking Economics

For staking infrastructure, EIP-7251 raises the individual validator’s staking limit from 32 ETH to 2048 ETH and introduces an aggregated signature mechanism. This improvement can reduce the number of nodes for large staking service providers by 98%, saving approximately $230 million annually in hardware maintenance costs. Additionally, EIP-7002 allows staking withdrawals to be triggered via smart contracts, increasing the capital utilization rate of liquid staking derivatives (LSD) to 93%, an 11 percentage point improvement over current levels.

Enhancing Developer Scalability

EIP-2537 introduces native support for cryptographic curves such as BLS12-377 and BW6-761, which will enhance the verification speed of zero-knowledge proofs (ZKP) by 40-60%. In zkRollup solutions, this means that proof generation time can be reduced from 23 seconds to 9 seconds. EIP-7588 also optimizes the data synchronization protocol for light clients, allowing mobile DApps to verify on-chain states with lower latency.

Improving Network Performance

Through SSZ container standardization (EIP-7495) and PeerDAS extension (EIP-7623), block propagation speed is expected to improve by 15%, and the node coverage rate for data availability sampling (DAS) is projected to increase from 78% to 94%. This lays the technical groundwork for future sharding upgrades, potentially increasing the Ethereum mainnet’s data throughput by 4-6 times.

Key EIPs Proposals

EIP-7251: Staking Limit Increase

• Technical Implementation: Increases the maximum effective balance for a single validator from 32 ETH to 2048 ETH and introduces an aggregated signature mechanism. Validator rewards will still be calculated based on 32 ETH to avoid centralization of earnings due to expanded staking scales.
• Application Scenarios: Validator consolidation, automatic compounding of staking rewards, etc.

EIP-3074: Account Abstraction Expansion

• Technical Implementation: Introduces AUTH and AUTHCALL opcodes in the EVM, allowing external accounts to authorize relay contracts to submit transactions on their behalf. Users sign offline messages containing the target contract, parameters, and gas limits, and the relay contract executes the transaction after verifying the signature.
• Application Scenarios: Social recovery (without mnemonic management), gas fee payment by others, batch processing of cross-chain operations, etc.

EIP-7702: Temporary Smart Contract Accounts

• Technical Implementation: Dynamically modifies the account storage structure through the convertToContractAccount function, allowing external accounts to convert to smart contract accounts during transaction execution, supporting temporary deployment of contract logic, and restoring the original state after the transaction ends. Compared to traditional proxy contract solutions, gas consumption is reduced by 35%, and contract interaction latency is decreased by 200ms.
• Application Scenarios: Completing token swaps + liquidity addition + yield reinvestment in a single transaction, automated distribution of NFT royalties, etc.

EIP-2537: Cryptographic Precompiled Extensions

• Technical Implementation: Introduces precompiled contracts in the EVM to support group operations and pairing verification for BLS12-377 and BW6-761 curves. The signature verification speed for BLS12-377 reaches 14,500 gas/op, a 62% efficiency improvement over existing elliptic curve solutions.
• Application Scenarios: zkSNARKs proof verification, on-chain privacy computing, development of quantum-resistant signature algorithms, etc.

Conclusion

The Pectra upgrade is a significant milestone in Ethereum’s technological roadmap, aimed at laying a solid foundation for the long-term development of Ethereum. By enhancing the network’s scalability and efficiency, Pectra is preparing Ethereum to welcome more users and enterprises in the future.
As the testnet validation progresses, the Pectra upgrade is expected to complete its mainnet deployment in 2025, further solidifying Ethereum’s leading position.

This could be a key step for future narratives to emerge from the currently subdued market, and we look forward to witnessing it.