While the investors and traders are stressing over the deadline of the potential Ethereum Exchange Traded Fund (ETH ETF) approval, the Ethereum developers have started preparing for the next major network upgrade.
This forthcoming Ethereum upgrade – dubbed Pectra Upgrade – is expected by the end of 2024. Considered as another important Ethereum upgrade after ‘Merge’ and ‘Shapella’, the Pectra upgrade is set to introduce several significant changes that will make Ethereum fundamentally more efficient.
In this article, we will dissect Pectra upgrade and discuss its potential impact it on the Ethereum network.
What is Pectra Upgrade?
Pectra upgrade is an upcoming Ethereum hard fork introducing smart contract-like capabilities to standard crypto wallets (EIP-3074) and a number of other improvements. The term ‘Pectra’ is derived from two simultaneous upgrades taking place – Prague at the execution level and Electra at the consensus layer – on Ethereum. All these improvements in Pectra address existing challenges while developing a strong foundation for the Ethereum ecosystem.
Another significant improvement this upgrade brings is maximizing the limit of effective balance for Validators. This upgrade embodies Ethereum core developer’s strategic approach to prepare for larger changes in future and improve overall user experience. It is a part of the developer’s ongoing efforts of making Ethereum more scalable and efficient with added functionalities.
Below is the list of improvement proposals that are included within the Pectra upgrade:
Account Abstraction (EIPs 3074, 5806, 7377): Streamline transaction authorization and facilitate asset migration for improved usability.
EIP-7251: Increasing maximum effective balance for validators to 2048 ETH
EIP-7610: Reverting smart contract creation for addressing existing (non-empty) storage.
EIP-7523: Forming a standard practive for exclusion of empty accounts.
EIP-7623: Increasing calldata costs which results in optimized block size and storage.
EIP-7639: Reducing data storage requirements by limiting pre-Merge data.
EIP-5920: Simplifying ETH transfers without triggering recipient functions in a transaction.
EIP-7609: Lowering transient storage costs that unlocks broader use of smart contracts.
EIP-2537: Introducing enhancements for network security and scalability.
Key Improvements in Pectra Upgrade
Among all these improvements, EIP-3074 and EIP-7251 are most important. Let’s discuss what changes both these improvements are bringing to Ethereum.
Smart contract capability to standard wallets (EIP-3074)
The EIP-3074 is most significant among all improvement proposals in the Pectra upgrade. It bridges the gap between traditional crypto wallets and smart contracts. This improvement introduces smart contract-like capabilities to the standard externally owned accounts (EOAs), which are simply created on wallets like MetaMask.
This will enable standard wallets to access broader features and functionalities, typically associated with smart contracts. For instance, wallets can engage in transaction bundling or grouping multiple transactions altogether. In addition, wallets can also sponsor transactions by paying transaction-gas for third party any other wallets. This integration will set ground for the futuristic expansion of decentralized finance (DeFi) ecosystem and smart contracts on Ethereum.
Increasing maximum effective balance for validators (EIP-7251)
The EIP-7251, called the “maxeb” improvement, aims to enhance the consensus layer’s scalability and stability. This will increase the maximum effective balance for validators from the current 32 ETH to 2,048 ETH. The increment drives streamlined staking operations while providing greater flexibility for validators. This EIP also mitigates the risk of possible instability of beacon-chain if ETH staking supply exceeds 50% on the network.
As it facilitates the consolidation of multiple validators into fewer “super validators,” maxeb intends to streamline validating efficiencies without impacting Ethereum’s monetary policy or rewards. It also benefits solo stakers by allowing them to accumulate rewards on amounts exceeding 32 ETH. However, despite the improvement being beneficial for Ethereum, the developer community is debating over its effects on validator capabilities and decentralization.
Gas efficiency for smart contracts (EIP-4758)
The EIP-4758 within this upgrade is aimed at optimizing gas efficiency. It introduces fundamental changes to the Ethereum Virtual Machine (EVM) that helps in reducing gas costs associated with certain operations.
This improvement proposal suggests updating required gas for the SLOAD, SSTORE, and CODECOPY opcodes, essentially making them cheaper to execute. It also introduced a new storage category called “warm” that haslower gas costs compared to “cold” storage, which incentivizes developers to reuse existing storage slots in the smart contract.
Furthermore, this improvement also makes precompiled contracts – like elliptic curve operations – functions cheaper to call from other smart contracts. All these optimizations could lead to a significant amount of gas savings, more specifically for those smart contracts which are heavily dependent on storage operations or other intensive cryptographic functions.
Visit The Crypto Times to stay up-to-date with the latest updates on Ethereum.
Conclusion
While the Pectra upgrade is not holding as much importance as Dencun or The Merge, it introduces several fundamental changes to Ethereum. These changes will be substantial for upcoming upgrades that will lead Ethereum towards achieving more efficiency, scalability and improved performance. Pectra is essentially setting a groundwork for the subsequent Verkle upgrade which will be found crucial in enhancing Ethereum’s storage capabilities.
Also Read: Ethereum Dencun Upgrade: Understanding Proto-danksharding & Other EIPs
