Key Highlights:
- The Pectra upgrade is set to be a big enhancement to Ethereum, going live before the end of Q1 2025.
- EIP-7702 enables regular wallets to act like smart contract wallets for one single transaction.
- EIP-7251 will let validators stake up to 2048 ETH while retaining the minimum stake of 32 ETH.
What is Ethereum’s Pectra Upgrade?
The Pectra upgrade is a significant update to the Ethereum network, merging two earlier planned upgrades—Prague and Electra—into one streamlined package. Pectra is scheduled to start deployment in early 2025 and is going to affect not only the execution layer, hosting decentralized applications and smart contracts but also the consensus layer responsible for Ethereum’s proof-of-stake system.
In brief, with Pectra, the wallets will be more secure and friendly; the validators can create larger stakes of ETH without the change in the minimum required stake of 32 ETH to a maximum of up to 2048 ETH.
For the moment, developers are still largely in the process of deciding exactly which Ethereum Improvement Proposals EIPs will make their way into the upgrade. According to Ethereum.org, eight key proposals have been chosen for the first phase of the Pectra package. Let’s dive into two of the most impactful ones and see how they’ll shape the future of Ethereum for users and developers alike.
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EIP-7702: Bringing Smart Contract Features To Regular Wallets
Polygon developer relations engineer Jarrod Watts has called EIP-7702 “one of the most game-changing upgrades Ethereum has ever seen.” Despite the simplicity with which Ethereum co-founder Vitalik Buterin wrote it—reportedly in just 22 minutes—this proposal promises profound improvements.
EIP-7702 is designed to make Ethereum wallets easier to use while enhancing security. If you’ve ever worried about losing access to your funds due to misplacing private keys, this update brings relief by offering more flexible recovery options. It introduces a new type of transaction that allows regular wallets to temporarily function like smart contract wallets. For instance, users can bundle multiple transactions into one or have another account cover the transaction fees for them.
What’s more, EIP-7702 lets third parties pay gas fees on your behalf in other cryptocurrencies, not just Ether, making transactions even more versatile. As explained by Ethereum core developer Marius van der Wijden, this feature opens up new possibilities for users by reducing the exclusive reliance on Ether for gas fees.
The proposal also adds a layer of security by allowing privilege de-escalation. Users can create sub-keys with restricted permissions—such as setting limits on how much can be spent per day, or restricting certain sub-keys to only work with specific applications or tokens. This gives users enhanced control over their account activities while keeping the overall security of their funds intact.
Compared to its predecessor, EIP-3074, EIP-7702 is more advanced, ensuring that these new features will remain compatible with Ethereum’s future updates.
EIP-7251: Higher Stakes, Fewer Validators
Another significant change in the Pectra upgrade is EIP-7251, which allows validators to stake up to 2048 ETH, a significant increase from the current limit, while still maintaining the minimum staking threshold of 32 ETH.
There are currently around 2,600 nodes on the Ethereum network running upwards of 1 million validators that, in total, stake around 27% of the total ETH supply. This figure is indicative of increased participation in the proof-of-stake mechanism of Ethereum. However, another side to this story is that too many validators can also be a problem. Some experts warn that an excess of validators could lead to network congestion and failed transactions.
EIP-7251 addresses this issue by allowing larger-scale node operators to run fewer validators. This not only reduces the operational complexity of the network but also makes it more efficient. For solo stakes, this update means they can compound their rewards and stake larger amounts without needing to maintain multiple validators.
Ethereum can conserve both the peer-to-peer messages sent out and data processed in validator updates by shrinking the set of validators, making the network faster and cheaper to operate.
Conclusion
The Ethereum Pectra upgrade, which is highly expected by the end of 2024 or early 2025, will bring lots of welcomed changes to the network. Key proposals to be included are EIP-7702 and EIP-7251, making wallets more secure, flexible, and user-friendly, while there is further fine-tuning of staking for validators.
By doing so, Ethereum is positioning itself to cater to this growing load from its users; it’s going to make a more scalable and efficient network, whatever the future may throw at it.
