Author: Jason Nelson; Compiled by: Vernacular Blockchain

Ethereum's Pectra upgrade is scheduled to be launched in March 2025, combining the originally planned separate Prague and Electra upgrades to achieve better integration and enhance scalability, efficiency and availability. The following is the main text:

01What is Ethereum Pectra upgrade?

Ethereum Pectra upgrade enhances the scalability, efficiency and staking flexibility of the network. Pectra extends the storage capacity of the Layer-2 solution while reducing costs.

One ​​of the most user-friendly improvements in Pectra is its flexible Gas payments. In Ethereum, "Gas" refers to transaction fees used to compensate validators for maintaining network security. Through account abstraction, Pectra allows users to pay these fees using ERC-20Tokens (such as USDC) without being limited to ETH. Account abstraction simplifies Ethereum transactions by making the wallet function more like a smart contract, providing users with more control over transaction execution.

Pectra upgrade also introduces PeerDataAvailabilitySampling (PeerDAS, i.e. peer data availability sampling). PeerDAS improves Ethereum's scalability by allowing nodes to verify data without fully storing transaction data, making the network more efficient. Another improvement is VerkleTrees, a new data structure combining Vector Commitments and MerkleTrees, providing Ethereum with more efficient data storage upgrades. VerkleTrees optimizes information storage and verification, significantly reducing the amount of data a verifier needs to save while allowing fast and secure access to network information.

02 When will the Ethereum Pectra upgrade occur?

The Ethereum Pectra upgrade is expected to be carried out in mid-March 2025 and will be implemented in two phases. The first phase will introduce key improvements, such as increasing the blob capacity of the second layer from 3 to 6, to reduce congestion and expenses, while enabling account abstraction, allowing payment of Gas fees with stablecoins such as DAI and USDC.

The second phase is expected to beImplemented by the end of 2025 or early 2026, advanced optimizations, including PeerDAS and VerkleTrees, will be implemented to improve data storage and network efficiency.

The last major Ethereum upgrade Dencun was launched on March 13, 2024. It introduced Proto-Danksharding, which reduces transaction costs for the second-tier blockchain by using temporary data called "binary large objects." These blobs do not need to rely on permanent on-chain storage, reduce network congestion, improve scalability, and lay the foundation for upgrades such as Pectra.

03How does Pectra upgrade work?

Pectra's key features include:

Account abstraction: This feature supports the use of multiple tokens (such as USDC, DAI) to pay for Gas fees and allows third-party fee sponsorship.

Smart Contract Optimization (EIP-7692): Improve the efficiency of Ethereum Virtual Machine (EVM).

Verifier upgrade: EIP-7002: Enable flexible staking withdrawal.

EIP-7251: Increase the verifier staking limit from 32ETH to 2048ETH.

Data storage enhancement: VerkleTrees: Reduce storage requirements and improve transaction processing.

PeerDAS: Enhances layer 2 scalability and reduces network congestion.

The Pectra upgrade introduces several Ethereum improvement proposals (EIPs) to enhance wallet availability, staking and scalability.

EIP-7702: enables externally owned accounts (EOAs) to temporarily run as a smart contract, simplifying transactions and replacing the now-defunct EIP-3074.

EIP-7251: Increase the maximum stake of each verifier from 32ETH to 2048ETH to reduce network congestion.

EIP-7002: Improve the verifier exit process to provide staking servicescommerce improves efficiency.

EIP-7742: Enhance the second layer of scalability by doubling transaction throughput, increasing Blob capacity and reducing fees.

EIP-2537: Introducing encryption efficiency improvements.

EIP-2935: Provides a mechanism to store historical block hash on the chain.

EIP-6110: Simplify the verification deposit process.

How does the Pectra upgrade affect users?

Pectra upgrade is expected to benefit Ethereum users in a variety of ways, including transaction batch processing, new recovery options and new wallet types.

Once Pectra upgrade is online, Ethereum users may see lower or even zero Gas fees, as third-party services and decentralized applications (dApps) will have the right to choose to sponsor transaction fees, which may completely eliminate transaction fees in some cases.

Pectra has also introduced new wallet features to improve the availability and accessibility of Ethereum, including:

Transaction batch processing: allows multiple transactions to be bundled into one, reducing costs and increasing efficiency.

Social Recovery: Provides a secure network for lost private keys, helping to restore wallet access through trusted contacts.

Native Multi-Signature Wallet: Enhances security by requiring multiple approvals to execute transactions, keeping funds from unauthorized access.

Potential Challenges of Pectra Upgrade

Ethereum developers expect Pectra to be launched smoothly, but there are still critical risks. According to a report released by Obol and Liquid Collective in June 2024, client diversity is an issue, as errors in mainstream clients can disrupt network stability. Operator centralization may also increase the risk of punishment due to concentration of pledges in a few entities. Reliance on cloud services such as AWS and Hetzner also brings downtime andThe risk of security vulnerabilities affects validator online time and network resilience.

Another challenge is that Pectra's upgraded wallet verification changes may expose old protocols that are not updated in time to vulnerabilities. At the same time, increasing pledge limits may encourage centralization, concentrate power in the hands of larger participants, and attract regulatory scrutiny. The slow adoption of distributed validator technology, which mitigates single point failure and reduces the risk of centralized control, may undermine network resilience.

Initial problems with the test network

These challenges became apparent in February 2025, when Pectra upgrades were activated on Ethereum's Holesky test network, but failed to achieve finality (i.e., the status of transactions being confirmed and permanently recorded on the blockchain). While this is a setback, the testnet "has the purpose of existence is to find problems," said Georgios Konstantopoulos, general partner and chief technology officer at crypto investment firm Paradigm.

Ethereum developers chose to postpone the release of Pectra to test upgrades on the "shadow fork" of Holesky Test Network, a temporary copy that allowed the test to continue while waiting for the Holesky Test Network to resume finality—eventually implemented on March 10, more than two weeks later than the first activation.

This is not the first time that the Ethereum upgrade has failed to achieve finality on the test network; in March 2024, the Dencun upgrade also encountered similar problems when it was online on the Goerli test network.

The next phase of preparations will be launched on March 17, a test network designed specifically for the Pectra upgrade, codenamed Hoodi. If all goes well, developers expect Pectra to go online on the mainnet on April 25.

04Pectra's future upgrade of Ethereum after Pectra is an important step in the Ethereum roadmap, consistent with its long-term vision of scalability, security and decentralization. As part of Ethereum’s transition to more efficient networks, Pectra has laid the foundation for future updates.

In January 2025, Ethereum co-founder Vitalik Buterin responded to ETH prices and the second layer expansionSolutions concerns about the impact of the cyber economy. Buterin stressed that the second layer of network needs to support the value of ETH by burning some of the fees or pledging them to community interests.

"We should think clearly about the economics of ETH," Buterin wrote. “We need to ensure that ETH continues to increase value even in a world dominated by the second layer, and it is best to solve the multiple modes of value accumulation.”

Buterin also calls for standardizing cross-chain capabilities, enhancing interoperability, and prioritizing security to prevent scrutiny on the second layer chain. He likens the importance of this moment to a “wartime mode”, emphasizing his determination to face these challenges and drive Ethereum to grow.

05 Summary

Pectra upgrade is another major update of Ethereum since its "merger" in 2022 and is scheduled to be launched in March 2025. It greatly improves network performance and user experience through technologies such as account abstraction and Verkle Trees, while introducing flexible Gas payments and higher staking limits. However, upgrades also face challenges such as client diversity and centralization risks. This article will deeply analyze the technical highlights and potential problems of Pectra upgrades, and take you to explore a key step in the future development of Ethereum.