The Ethereum Pectra upgrade may have a date set soon
The Ethereum network may introduce the long-awaited Pectra upgrade on May 7. Until recently, the upgrade was expected around April 30. Pectra will be the biggest upgrade for Ethereum since the Dencun fork, which dramatically decreased fees for L2 projects.
Ethereum developers pointed to May 7 as the confirmed date, though the Ethereum Foundation and Vitalik Buterin are yet to speak on the Pectra upgrade.
The decision for the set date arrived after a developer call on April 3. The readiness to launch Pectra on the mainnet follows the final test of the fork on the Hoodi testnet last week.
The Pectra upgrade has a minor prediction pair, which has not been resolved yet. The prediction pair seeks to determine whether Pectra will launch by April 30. Despite the May 7 date, the prediction pair is only up to 84% probability for a ‘No’ answer.
Pectra to affect all ecosystem participants
The Pectra upgrade is a collection of several Ethereum Improvement Proposals (EIP), which will target multiple types of users. The upgrades will affect potential validators, L2 operators, and end users with Ethereum wallets.
The potential validators will receive the chance to stake up to 2,048 ETH at a time for more efficient establishment of nodes. The larger stakes will help institutional players deal with a single validator instead of thousands of nodes with 32 ETH each.
Staking activation will also be speeded up through EIP -6110. Two more proposals will ensure faster withdrawals for validators, as well as simplified exits with a smaller risk of loss.
The second set of proposals affects L2 protocols and the way they use the L1 chain. Blob capacity per block will be doubled from 3 to 6 blobs. Pectra will also increase calldata costs, encouraging L2 to use more blobs. The blob schedule and flexibility will also offer more predictable fees. Currently, protocols pay close to zero rent to the L1, with days of sudden spikes in block fees and unexpected expenses.
Ethereum’s EIP-2537 will also make L2 potentially cheaper and encourage cross-chain apps. The Pectra upgrade is yet to show if it will solve the problem of low earnings from L2, which pays minimal fees to Ethereum.
EIP-7702 will be important for end users and general Ethereum adoption. The proposal will turn wallets into smart contracts, allowing for gas sponsorship, easier wallet-based tasks, and batch transactions. EIP-7702 will introduce smart wallet functionality, which may allow apps to onboard Ethereum users while sponsoring fees.
Ethereum will also introduce a fourth transaction type, offering composable complex transactions for faster, more user-friendly swaps. Currently, Ethereum has three main types of transactions beyond legacy transfers, with dynamic transactions having the biggest share. The fourth type of transaction will allow every end user wallet to swap and approve in a single transaction, meaning each user wallet will behave like a smart contract.
Pectra news fails to revive Ethereum sentiment
Pectra has been one of the expectations for re-sparking interest in Ethereum. Despite the successful testnet upgrades, the price of ETH did not react to the news of the imminent fork coming in weeks.
After the news, ETH felt more selling pressure, sinking to $1,774.56. The bearish mood also comes from slowing on-chain activity, as Ethereum is mostly used for simple ETH transactions and USDT transfers.
Ethereum still had the biggest share of DEX activity and is the go-to chain for larger USDT transfers and perpetual futures trading. The Pectra upgrade is seen as one potential turning point for scaling ETH and inviting more app users.
Ethereum has been losing revenues after years of peak fee production. For the past month, Ethereum only brought $20M in total fees, with a trend of diminishing returns for validators. More on-chain apps sponsoring gas for end users may revive the usage of Ethereum.