On May 7, 2025, Ethereum activated its latest major network upgrade, Pectra.
This update brings several key changes to the protocol, improving user experience, enhancing validator operations, and expanding scalability through new Ethereum Improvement Proposals (EIPs).
Smart Accounts and Account Abstraction (EIP-7702)
First, the Pectra upgrade introduces EIP-7702, a big step toward account abstraction. This proposal lets Ethereum wallets (EOAs) work like smart contracts, allowing users to perform transactions with automated permissions, delegated actions, and alternative payment methods for gas fees, including ERC-20 tokens instead of only Ether. This feature makes the user experience smoother by reducing frequent approval requests and wallet pop-ups. It also allows developers to create apps that feel more like Web2 interfaces while maintaining the security of blockchain systems. However, this added functionality brings potential security risks. Malicious apps might trick users into signing harmless-looking messages, which could lead to wallet theft. Despite this, many in the community believe EIP-7702 is safe if used properly and is narrow enough to avoid major risks.
Ethereum Upgrade Simplifies Institutional Staking (EIP-7251 & EIP-7002)
Next, Ethereum’s validator system received important upgrades with EIP-7251, which raises the staking limit per validator from 32 ETH to 2,048 ETH. This is especially helpful for institutional validators, who previously had to manage many smaller validators to handle large amounts of capital. Now, with the higher limit, they can combine operations, cut costs, and make management easier. EIP-7002 also simplifies staking withdrawals. Before, validators had to wait over 13 hours to generate withdrawal credentials from staking service providers. Now, they can complete withdrawals in about 13 minutes, and importantly, without needing a signed message from the provider. This update gives validators more control and reduces operational risk.
Pectra Upgrade Enhances Layer-2 Scalability (EIP-7691)
In addition, EIP-7691 improves Ethereum’s scalability by increasing the number of data blobs in each block. These blobs are used by layer-2 rollup solutions, like Optimism and Arbitrum, which depend on Ethereum for data. Ethereum’s main system can handle more rollups by supporting more data blobs per block. This change not only cuts transaction fees but also lets more users and activity happen without blocking the main chain. This makes Ethereum’s scalability stronger for the future. Furthermore, EIP-6110 improves how Ethereum’s execution and consensus layers work together. Now, validator deposits appear directly in the execution-layer block, speeding up the onboarding process and reducing the need for indirect communication. This small change makes data more efficient and strengthens Ethereum’s unified system.
Finally, while earlier bugs affected the Holesky and Sepolia test networks, developers have fixed these problems. As a result, the mainnet upgrade went smoothly, showing the cooperation and strength of Ethereum’s client developers and the broader community. The Pectra upgrade is bullish for Ethereum as it boosts scalability, improves user experience, and enhances institutional staking. Key features like smart accounts (EIP-7702), higher staking limits (EIP-7251), and more data capacity for layer-2s (EIP-7691) make Ethereum more efficient, user-friendly, and attractive to developers and investors, strengthening its ecosystem and long-term value.