Ethereum: The Pectra Era

Introduction

The long-awaited Pectra upgrade is nearly here, and developers are working to lock it in on May 7th. Ethereum core developers scheduled Pectra about a week after the upgrade went live on the Hoodi testnet. Earlier tests uncovered bugs, which delayed the upgrade on mainnet. However, after the upgrade went live on the Hoodi testnet without any issues, the decision to schedule Pectra came a week later.

This major upgrade is good news for Ethereum enthusiasts who hope Pectra helps kick off a solid start to 2025 and mutes some critics who cite ETH’s poor performance relative to BTC in 2024.

The Ethereum Roadmap

Ethereum is moving from the Beacon Chain towards the Beam Chain. The Beam Chain is a proposal to redesign Ethereum’s consensus layer, and researchers like Justin Drake have introduced some strong recommendations for reaching this goal. Some of the suggested upgrades can be accomplished incrementally within the next few years, while other big-ticket items need to be brought on the mainnet on the Beam fork.

Changing the architecture of the Beacon Chain to complete the entire Roadmap to the Beam Chain will take four to five years, encompassing the years from 2025 to 2029. Since one of the main criticisms from the Ethereum community is how long these changes will take, it’s important to note that not all of these changes will require five years. There would be four gradual upgrades before the Beam fork for the Consensus layer. However, even this time frame is ambitious for the developers for such a big fork.

Drake’s proposals are receiving acceptance from the developers and researchers. But next comes the challenge of winning the hearts and minds of the wider Ethereum community. For now, we have the much-anticipated Pectra Upgrade.

What Is Pectra?

Petra is the first significant upgrade since Dencun in March 2024 and the most ambitious to date. Pectra houses more Ethereum Improvement Proposals (EIPs) than previous upgrades which makes it different from past upgrades that only have a single focus. This upgrade comprises the Prague execution layer hard fork and the Electra consensus layer upgrade and touches many things on the consensus layer and the execution layer. Furthermore, Pectra significantly improves UX, network scalability, validator flexibility, the staking experience, execution efficiency, and the network overall.

Understanding the EIPs Involved

The following Ethereum Improvement Proposals (EIPs) within the Pectra upgrade will significantly impact UX, staking, and the network’s scalability.

EIP-6110

This proposal makes new validator onboarding much quicker by impacting validator activation, deposit time, and deposit security. It eliminates the current consensus layer voting mechanism (Eth1Data polling) and integrates validator deposit functionality directly into Ethereum’s execution layer.

By eliminating Eth1Data polling, deposit processing time can be effectively completed in approximately 13 minutes. Removing reliance on Eth1Data polling also significantly increases deposit security by eliminating the risk of adversarial behavior. Furthermore, EIP-6110 reduces the engineering and design complexity of consensus layer client software.

EIP-7002

This EIP brings a significant flexibility change for staking while positively impacting staking security and validator withdrawals and exits.

At present, validator exits and withdrawals can only be triggered from the consensus layer. EIP-7002 adds a new mechanism that allows validators to manually initiate these exits and withdrawals from the execution layer with their withdrawal credentials via an externally owned account or smart contract.

Exit requests are submitted to the execution layer to be processed by the consensus layer, just like in a consensus layer-triggered exit. Withdrawal requests will be forwarded to the execution layer and then included in the execution layer manual withdrawal queue, which allows eight withdrawals per block. This new mechanism in EIP-7002 will be an addition, not a replacement, of consensus layer-triggered withdrawals and exits.

Limiting withdrawals and exits to a validator’s active key can pose limitations. They can also introduce unnecessary risk because active keys that sign and perform validator duties are hot and might have security vulnerabilities.

On the other hand, enabling withdrawal credentials to perform exits and withdrawals will remove total reliance on potentially vulnerable active keys. Withdrawal credentials remain cold when they are used only for withdrawal operations. Thus, eliminating this reliance will also reduce trust dependencies for stakers who delegate to providers. EIP-7002 will make Ethereum staking more secure and trustless.

EIP-7251

Ethereum Improvement Proposal 7251 increases the MAX_EFFECTIVE_BALANCE. This EIP is one of the key Pectra changes that will benefit Ethereum validators. It primarily impacts staking efficiency and liquidity, validator management, and exits. EIP-7251 changes exit mechanics in staked ETH to mitigate excessive fluctuations.

Currently, a churn limit denominated in the number of validators per epoch (16) governs the exit queue. With EIP-7251, the total churn per epoch will be based on the amount of ETH to leave the network. Further, churn will be hard-capped at 256 ETH per epoch, which adds up to 57,600 ETH per day.

Moreover, EIP-7251 increases the ETH staking cap to 2,048. This means that 2,048 ETH is now the MAX_EFFECTIVE_BALANCE (MEB). Previously, validators were capped at 32 ETH each.

When Ethereum developers launched the Beacon Chain, every validator was essentially the same size relative to the stake they put into the system to become a validator. This stake was capped at 32 ETH which was not ideal for those who wanted to stake more than that.

This lower cap forced larger stakers to set up multiple validators. Since the same entity often operated these validators, the practice increased the total validator count, P2P messages, and signatures to process, putting more strain on the network’s bandwidth without increasing decentralization.

With a higher MEB, larger stakers and staking providers won’t have to spread their funds to so many validators. They can consolidate instead. For example, if a staker has 96 ETH, they can use one validator to manage it all rather than staking 32 ETH with three separate validators. This proposal simplifies operations and reporting for large staking operators and improves flexibility. A reduced number of validators also lowers the attestation load and the network’s overhead. This change will improve overall consensus efficiency and staking scalability.

EIP-7549

This proposal impacts validator performance and network overhead and moves the committee index outside of Attestation, essentially refactoring how attestations look on the network. Attestations are the messages that validators sign that contribute to the PoS consensus mechanism. One way to think about this is packing more Attestations into one message, which helps with scale in different instances.

Ethereum validators are grouped into committees to submit Attestations. The index field represents the committee index. When a validator signs an Attestation, the index field gets included. This field indicates the committee that the validator was assigned to for the given epoch.

At present, the index field sits inside the signed Attestation message, but this upgrade relocates it outside. So, before the upgrade, two validators from different committees that voted identically had different signatures because their index values were included in their signatures. However, with EIP-7549, identical votes across different committees will produce the same signature.

Stakers won’t notice any changes to validator rewards, or slashing, but validators will benefit from this more optimized consensus process. This proposal is important because it makes Attestation aggregation and verification more efficient. It reduces processing overhead for validators to help them operate more efficiently. It should also reduce network load and improve flexibility for staking providers.

EIP-7691

The changes here increase blob throughput and impact Rollup performance and network scalability. Blob transactions allow Rollups to store large amounts of data in temporary blobs rather than calldata. These blob transactions are more efficient and significantly reduce network congestion and gas fees. EIP-7691 increases this blob throughput by raising the target number of blobs per block. That number will rise from three to six, and the maximum number of blobs per block will increase from six to nine.

EIP-4844 from the Dencun upgrade introduced blob transactions, and EIP-7691 builds on it. This new EIP will allow blobs to accommodate more data in each block, improving data availability for Rollups. Ethereum will also adjust the update mechanism for the blob base fee so that fee changes remain responsive to network usage with these new blob limits.

Increasing blob throughput allows Rollups to process more transactions. This advancement should reduce congestion and improve transaction speeds with increased data availability. It should also enable Rollups to operate more efficiently, lowering gas fees. Scaling blobs is very important for the Layer-2 economy to reduce costs and allow more users to transact there.

EIP-7702

Ethereum Improvement Proposal 7702 introduces a new transaction type that will impact wallets, dApps, and UX. It allows externally owned accounts to temporarily act as smart contracts for a transaction’s duration to execute smart contract code without permanently converting into a contract account. Among other things, EIP-7702 will enable wallets to execute batch transactions and allow for the implementation of custom validation logic.

These changes will improve wallet functionality, UX, and gas efficiency by reducing end-users steps to interact with DeFi protocols and other dApps. Users will no longer have to leave an application to complete transactions, thus creating a more seamless on-chain experience and reducing the likelihood of user drop-off. EIP-7702 brings Ethereum closer to complete account abstraction making the network more efficient, and user-friendly.

More EIPs in the Pectra Upgrade

Above are some of the major changes introduced in the Pectra upgrade. Other changes are listed below, and you can follow the links for a detailed description:

EIP-2537: Precompile for BLS12-381 curve operations

EIP-2935: Serve historical block hashes from state

EIP-7623: Increase calldata cost

EIP-7685: General purpose execution layer requests

EIP-7840: Add blob schedule to EL config files

The Road to Mainnet

Pectra hit some bumps in the road during testnet deployments before achieving full finalization on the new Hoodi testnet. However, successful activation on Hooti resulted in confirming the May 7th mainnet launch date as long as the testnet demonstrates continued stability during the 30-day monitoring period.

Looking beyond Pectra, one day, we could see Ethereum’s consensus layer undergo a complete redesign if Drake’s proposal to replace the Beacon Chain with the more advanced Beam Chain comes to fruition.

However, the next upcoming upgrade scheduled for later in 2025 is Fusaka, and some of the EIPs that will be included will cover blobs, data availability, and the EVM Object Format (EOF). Ethereum needs more blobs for Rollups like Base and various consumers of its data, so getting more blobs is a top priority. Developers want to scale blobs as aggressively as possible. Pectra brings a 2x improvement, and if Fusaka can ship by the end of the year with an 8x improvement on Pectra, that brings a 16x increase to the network’s capacity compared to where we are now.

The next iteration to scale the data plane is to change how Ethereum handles data availability. EOF will also be a big upgrade to today’s virtual machine of Ethereum. So, Ethereum supporters have lots to look forward to in 2025.

About Luganodes

Luganodes is a world-class, Swiss-operated, non-custodial blockchain infrastructure provider that has rapidly gained recognition in the industry for offering institutional-grade services. It was born out of the Lugano Plan B Program, an initiative driven by Tether and the City of Lugano. Luganodes maintains an exceptional 99.9% uptime with round-the-clock monitoring by SRE experts. With support for 45+ PoS networks, it ranks among the top validators on Polygon, Polkadot, Sui, and Tron. Luganodes prioritizes security and compliance, holding the distinction of being one of the first staking providers to adhere to all SOC 2 Type II, GDPR, and ISO 27001 standards as well as offering Chainproof insurance to institutional clients.

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