Ethereum Prague-Electra (Pectra) upgrade is expected to be the third large hard fork post-Merge. Set to be activated in 2025-2026, Pectra will make ETH staking more resource-efficient, enhance the blob mechanism, address lost keys issues and advance the way the second largest blockchain employs Account Abstraction (AA).
Ethereum’s Pectra upgrade explained: EIPs, activation date, opinions
Prague-Electra or Pectra is a hotly-anticipated upgrade (hard fork) on the Ethereum (ETH) blockchain that will include two phases and make the network faster, cheaper and more flexible.
- Pectra (short for Prague-Electra) is an upcoming Ethereum (ETH) blockchain hard fork that is expected to be activated in two phases;
- Pectra is under discussion with the largest agenda of post-Merge hard forks as it includes 11 standard Ethereum Improvement Proposals (EIP) and one Meta-EIP with 11 points;
- Largely, the EIPs are focused on improved data logistics, more flexible and resource-effective staking, streamlined smart contracts deployment and better L1/L2 interaction;
- While the exact timeline for the upgrade is yet to be disclosed, developers are going to activate its first phase in 2025 and the second phase in 2026;
- Pectra is expected to make both Ethereum’s L1 and L2s more powerful and comfortable for decentralized application (dApps) development;
- Also, with upgraded Account Abstraction, Ethereum (ETH) users will be able to pay gas fees in tokens beyond ETH, including stablecoins USDC, DAI and so on.
Initially scheduled for Q4, 2024, Pectra was postponed a number of times as more and more EIPs were included into its agenda. Some details of the hotly-anticipated “Mega-Sized Upgrade” might still be subject to changes.
Meanwhile, it’s safe to say that Pectra will be the most crucial network upgrade for Ethereum (ETH) and for the entire EVM ecosystem for at least the 2025-2026 years. It is also expected to pave the path for most advanced stages of Ethereum (ETH) decentralization.
What is Ethereum?
Ethereum (ETH) is a decentralized network (blockchain) that acts as a general-purpose distributed computational platform for smart contracts. Using Ethereum (ETH), decentralized applications of various types can store, transfer and retrieve information.
It is a worldwide system, an open-source platform to write computer code that stores and automates digital databases using smart contracts without relying upon a central intermediary, solving trust with cryptographic techniques
Ethereum (ETH) is the basis of Ethereum Virtual Machine, a mechanism that runs smart contracts as simple software programs. Expanding on top of Bitcoin’s (BTC) success, Ethereum (ETH) was the first programmable blockchain in history.
Ethereum (ETH) was launched in 2015 by Vitalik Buterin, Joseph Lubin and their colleagues. Its native cryptocurrency is dubbed Ether and is now the largest altcoin by market capitalization.
What is hard fork on Ethereum?
Just like on other blockchain systems, on Ethereum (ETH), a hard fork is a network split organized to activate major network upgrades. As a result, the nodes should adopt updated versions of software and get synchronized; those who fail to install new software have their nodes deprecated.
Hard forks are necessary to improve network performance, security, synchronization logics, aggregated throughput and so on. On Ethereum (ETH), every hard fork is discussed for months during the meetings of its core developers.
In order to be included into the agenda of network upgrades, every hard fork should be approved by top-tier Ethereum (ETH) developers. Every upgrade consists of Ethereum Improvement Proposals or EIPs, i.e., suggestions on how to make Ethereum (ETH) better.
Ethereum hard forks 101: Most radical changes
While Ethereum (ETH) underwent dozens of hard forks, some of them changed its design and manner of operations forever.
London: EIP 1559 arrived
In August 2021, during the London hard fork, Ethereum’s (ETH) monetary policy underwent its most profound change. In 2015-2021, Ethereum’s (ETH) fees policy was straightforward: For every given block, network fees were equal.
EIP 1559 introduced a dynamic fees structure: It now depends on the exact metrics of network activity. It might significantly vary from block to block based on how many transactions were completed by fact.
Also, EIP 1559 introduced periodical fee burn events. Typically, this mechanism is treated as the most significant ETH price catalyst in the long run.
The Merge: From PoW to PoS
Activated Sept. 15, 2022, the Merge is the most crucial network upgrade in Ethereum’s (ETH) history. By activating the Merge, Ethereum replaced its old proof-of-work (PoW) consensus with proof of stake (PoS), which is usually treated as a more resource-efficient, eco-friendly and inclusive type of network consensus.
This event is a unique one for crypto: No blockchain has ever moved from PoW to PoS, replacing mining with staking as the core method of contributing to network security. Despite much controversy, the Merge transition went smoothly.
Shapella: Welcoming ETH unstaking
The Shanghai-Capella or Shapella upgrade took place on the Ethereum (ETH) network April 12, 2023. Basically, it is only known for its major EIP that finally allowed the withdrawal of ETH from staking contracts.
From the onset of this contract, Ethereum (ETH) stakers had to inject 32 ETH minimum in order to get staking (validation) rewards. During the inaugural phase of Ethereum migration to proof of stake (PoS), this process was irreversible. As such, staking was too risky due to the highly volatile nature of the cryptocurrency market.
With the Shapella upgrade live, stakers became able to manage their portfolios with ease as they were free to unstake and withdraw their ETH deposits.
Despite big pessimism, the outflow of ETH from staking contracts never happened.
Dencun: Proto-Danksharding changes game for Ethereum’s L2s
Ethereum’s Dencun (Cancun-Deneb) upgrade rolled out on the mainnet March 13, 2024. It reconsidered the way information is stored and transferred by Ethereum (ETH) to make the whole network more resource-efficient and streamline the interaction between L1 and growing Ethereum’s L2s.
Its main EIP was EIP 4844 or “Proto-Danksharding.” It introduced a completely new data structure called “blob.” Blobs should be referred to as large data bundles that increase the capacity for storing and processing data on the Ethereum network, paving the path for a potential 1,000x speed increase on Layer 2 networks like Arbitrum and Optimism.
Most crucial Ethereum (ETH) hard forks: Quick facts
Here is some data about how London, the Merge, Shapella and Dencun affected the design of the Ethereum (ETH) blockchain.
Prior to being deployed to the Ethereum (ETH) mainnet, every hard fork is tested on corresponding test networks.
Ethereum’s Prague/Electra hard fork: What to know
Ethereum’s Pectra (Prague+Electra) hard fork is set to be the largest-ever one-time upgrade for Ethereum from the onset of the network.
Ethereum Pectra: Basics
Ethereum Pectra is a hard fork (radical upgrade) for the Ethereum (ETH) blockchain. It is expected to be activated in two steps, scheduled for early 2025 and 2026, respectively. The exact timeline and details of the agenda for the hard fork are still being discussed by Ethereum (ETH) core developers.
Meanwhile, the focus areas of the upcoming upgrade are known. Pectra’s activation will be tasked with making ETH staking flexible and more resource-optimized, paving the way for cheaper L2s transactions, handling issues of lost keys and implementing streamlined smart contracts practices.
updates from acdc #144:
– devs agreed to include eip 7742 in pectra, meaning some kind of blob capacity increase in the upgrade is also likely to get included
– pectra devnet 3 has been shut down, pectra devnet 4 launch is happening today
– additional networking changes beyond…— Christine Kim (@christine_dkim) October 18, 2024
Being an expansion of Ethereum’s Shapella and Dencun hard forks, Ethereum Pectra is a major milestone in the journey toward Ethereum 2.0, the next iteration of the largest smart contract platform ever. While it is only taking its shape, it is already obvious that Pectra will be the largest and most profound network upgrade in years.
Ethereum Pectra: What changes
As of mid-October 2024, Ethereum (ETH) core developers agreed on the following list of EIPs to be included in the coming upgrades:
- EIP-2537: Precompile for BLS12-381 curve operations
- EIP-2935: Save historical block hashes in state
- EIP-3074: AUTH and AUTHCALL opcodes
- EIP-6110: Supply validator deposits on chain
- EIP-7002: Execution layer triggerable exits
- EIP-7251: Increase the MAX_EFFECTIVE_BALANCE
- EIP-7549: Move committee index outside Attestation
- EIP-7594: PeerDAS – Peer Data Availability Sampling
- EIP-7685: General purpose execution layer requests
- EIP-7702: Set EOA account code for one transaction
- EIP-7742: Uncouple blob count between CL and EL
Also, the agenda of future upgrades includes EIP-7692: Meta EIP with the following proposed changes:
- EIP-663: SWAPN, DUPN and EXCHANGE instructions
- EIP-3540: EOF (EVM Object Format) – EVM Object Format v1
- EIP-3670: EOF – Code Validation
- EIP-4200: EOF – Static relative jumps
- EIP-4750: EOF – Functions
- EIP-5450: EOF – Stack Validation
- EIP-6206: EOF – JUMPF and non-returning functions
- EIP-7069: Revamped CALL instructions
- EIP-7480: EOF – Data section access instructions
- EIP-7620: EOF Contract Creation
- EIP-7698: EOF – Creation transaction
Let’s check out the most crucial upgrades in the agenda of Pectra.
EIP-3074 advances the status of Account Abstraction on the Ethereum (ETH) network. It allows externally-owned accounts to delegate control over its activity to smart contracts. This, in turn, unlocks the opportunities for previously unseen DeFi designs. It might also solve the issues of irreversible key losses for Ethereum’s on-chain accounts.
EIP-7251 increases the maximum balance for validators from 32 ETH to 2,048 ETH. This helps larger node operators consolidate their stake and reduces the overall number of validation nodes needed.
EIP-7594 introduces the PeerDAS (Peer Data Availability Sampling) mechanism to optimize Layer 2 solutions. This concept offers a completely new level of data availability for all dApps by reducing the volume of information needed to be transferred between nodes.
EIP-7692 is a “Mega-EIP” of 11 proposals focused on improving the Ethereum Virtual Machine (EVM) Object Format (EOF), which is a structure used to represent Ethereum smart contracts. By optimizing this format, EIP-7692 aims to make smart contract deployment more streamlined for every user.
EIP-7742 is expected to lift the blob maximum and, therefore, make data processing during L1/L2 interactions cheaper.
Ethereum Pectra: Activation date
Initially, the activation of the Ethereum Pectra upgrade was scheduled for late Q4, 2024. However, after a number of rounds of discussion, the activation date was postponed to 2025-2026. It is safe to say that the first stage of the upgrade will go live in Q1, 2025.
At the same time, the agenda for the upcoming network might be changed, which, in turn, would result in another delay for Pectra’s activation.
Ethereum Pectra: What it means for ETH holders
Historically, all successful Ethereum (ETH) network updates resulted in increased network activity, an inflow of new money to the Ethereum (ETH) ecosystem and a consequent price surge. Besides that, the introduction of updates focused on developer-friendliness and resource-efficiency will give the EVM ecosystem another boost on both Layer 2 and Layer 1.
Despite the lack of direct monetary changes included in the discussion about Pectra’s future, its success will contribute to general optimism of existing and potential ETH investors and holders.
Bonus: Will Pectra affect ETH staking?
In short, it definitely will.
First of all, the largest validators will enjoy the increased level of maximal deposit per Ethereum (ETH) validation node. As such, for major players of the Ethereum (ETH) staking market, the entire process becomes more cost-effective.
This process is accompanied by the rhetoric of the Ethereum (ETH) creator Vitalik Buterin, who repeatedly stressed the necessity of inclusion of small validators into ETH staking. Recently, he proposed to reduce the minimum deposit to 1 ETH from the current 32 ETH.
All these changes open the avenue for a more flexible, robust and diverse ETH staking ecosystem.
Wrapping up
Ethereum Pectra (Prague-Electra) is a much-anticipated hard fork for the Ethereum (ETH) blockchain. Expected to be rolled out in 2025-2026, it includes a previously unseen number of EIPs.
Primarily, Pectra will be focused on developer-friendliness, staking efficiency, data availability and better UX for various classes of accounts on the Ethereum (ETH) mainnet. It also advances Account Abstraction and Proto-Danksharding workloads in Ethereum 2.0 road maps.
Read the full article here
