Ethereum Pectra Upgrade Explained: A Beginner’s Guide
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Key takeaways:
- The Pectra upgrade is a major Ethereum upgrade planned to be implemented sometime before Q1 2025.
- One of the most important proposals, EIP-7702, allows a regular wallet to act like a smart contract wallet for the duration of a transaction.
- Another selected proposal, EIP-7251, permits validators to stake more Ether, up to 2048 ETH, while maintaining the minimum stake at 32 ETH.
What is Ethereum’s Pectra Upgrade?
Pectra is a major Ethereum network upgrade that merges previously planned upgrades, Prague and Electra, into a single, more efficient one. The first part of the Pectra package is scheduled for early 2025.
Pectra impacts both the execution layer, where smart contracts and dApps operate, and the consensus layer, which manages the proof-of-stake mechanisms.
In short, Pectra aims to make Ethereum wallets more secure and easier to use. It also allows validators to stake larger balances—up to 2048 ETH, while maintaining the minimum stake at 32 ETH.
As of now, developers are still discussing which Ethereum Improvement Proposals (EIPs) to incorporate. According to the Ethereum.org website, eight proposals will be included in the first package. Here are some of the most significant ones, how they function, and what their implementation means for users and developers.
EIP-7702: Regular Wallets Gain Smart Contract Features
Jarrod Watts, Polygon’s developer relations engineer, called this proposal “one of the most impactful changes Ethereum is going to have… EVER,” despite the fact that it reportedly took Vitalik Buterin 22 minutes to write.
Vitalik just proposed EIP-7702.
It's one of the most impactful changes Ethereum is going to have… EVER.
So, here's everything you need to know about how it works and how we got here:
— Jarrod Watts (@jarrodWattsDev) May 8, 2024
EIP-7702 is designed to make Ethereum wallets easier and safer to use, with more flexible recovery options if you lose your private keys. It introduces a new type of transaction where, for just the duration of that transaction, your regular wallet can act like a smart contract wallet. This means you can do things like batch transactions (combining multiple steps into one) or let another account cover transaction fees for you.
As Ethereum core developer Marius van der Wijden told Decrypt, allowing third parties to pay gas fees for you effectively means that users can pay gas fees in other cryptocurrencies instead of just Ether.
Additionally, EIP-7702 allows for privilege de-escalation, where users can sign sub-keys and assign them limited permissions. This can include allowing these keys to spend only specific types of tokens, spend up to a certain amount of your total balance per day, or only interact with specific applications. This aims to provide users with enhanced security and control over account activities.
This update improves on an earlier proposal (EIP-3074) by ensuring these new features will still work well with future changes planned for Ethereum.
EIP-7251: More Ether Can Be Staked With Fewer Validators
EIP-7251 permits validators to stake larger balances, up to a new maximum of 2048 ETH, while maintaining the minimum stake at 32 ETH.
As of July 2024, approximately 2,600 Ethereum nodes were running more than 1 million validators. This is roughly 27% of the total ETH supply. The situation could be problematic for the network, and some experts note that too many validators “can ultimatively lead to failed transactions.”
EIP-7251 enables large-scale node operators to run fewer validators, which simplifies the network and reduces the number of required operations. For solo stakers, it means they can gain more through compounding rewards and have the flexibility to stake amounts above the minimum more easily.
This adjustment helps reduce the clutter of too many validators, which can slow down the network by increasing the number of peer-to-peer messages and the data that needs to be processed each time validators are updated. By consolidating validators, the network can become more efficient and less costly to maintain.
Other selected EIPS
EIP-2537: Precompile for BLS12-381 curve operations. This EIP adds a precompiled contract for the BLS12-381 curve to Ethereum, enhancing the efficiency of operations like BLS signature verification.
EIP-2935: Save historical block hashes in state. EIP-2935 proposes storing the last 8,192 block hashes in a system contract, enabling stateless execution by allowing these hashes to be part of the block processing logic.
EIP-6110: Supply validator deposits on chain. EIP-6110 integrates validator deposits directly into the Ethereum Execution Layer block, streamlining the deposit process by removing the need for deposit voting in the Consensus Layer.
EIP-7002: Execution layer triggerable exits. EIP-7002 allows validators to initiate exits and partial withdrawals using their execution layer (0x01) withdrawal credentials. This enables validators to manage their staked ETH more securely and independently.
EIP-7549: Move committee index outside Attestation. This change reduces the computational load required to verify consensus rules, particularly benefiting zero-knowledge circuits by decreasing the number of necessary attestations.
EIP-7685: General purpose execution layer requests. EIP-7685 establishes a framework for making execution layer-triggered requests visible to the consensus layer.
Conclusion
The Pectra upgrade, planned for late 2024 to early 2025, may become a significant improvement for Ethereum. It includes important changes like EIP-7702 and EIP-7251. EIP-7702 makes Ethereum wallets more flexible, allowing them to function temporarily like smart contract wallets, which enhances security and makes them easier to use.
EIP-7251 allows validators to stake larger amounts of Ethereum, improving the network’s efficiency.
Together, these upgrades aim to make Ethereum more user-friendly, secure, and scalable, gearing it up for future demands.
FAQs
What is the Ethereum Prague-Electra (Pectra) upgrade?
Ethereum Prague Electra (Pectra) upgrade is the next important upgrade scheduled for Q1 2025. Pectra enhances Ethereum’s scalability, security, and user experience by introducing more efficient data handling, increasing validator stake limits, and streamlining smart contract operations. These advancements aim to improve Ethereum’s infrastructure, making it more robust and flexible for developers and users.
What is EIP-7702?
EIP-7702 makes Ethereum wallets not only easier to use but also provides more options for recovering access if you ever lose your private keys. It introduces a special kind of transaction that temporarily allows your regular wallet to function as a smart contract wallet. During this time, you can process multiple transactions at once or have someone else pay the transaction fees for you. EIP-7702 improves an earlier proposal, EIP-3074, ensuring that these capabilities are compatible with future Ethereum updates.
Will the Ethereum’s Pectra upgrade increase the price of ETH?
It’s hard to predict how the Pectra upgrade will impact the price of ETH. The effect of this upgrade on Ethereum’s price will depend on factors like how the upgrade improves Ethereum’s technology and how users and investors view these improvements.
If Pectra successfully enhances Ethereum’s capabilities, it could positively influence investor confidence and potentially boost ETH prices. However, market conditions and investor sentiments play a crucial role, and the actual impact may vary. As with any major update, the real effects will unfold over time.
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