All you need to know about the next Ethereum upgrade – Prague-Electra (Pectra)

Most of the conversation surrounding Ethereum in recent times is focused on the approval of spot Ether ETF applications by the United States Securities and Exchange Commission. The investing community is glad that they can now gain exposure to the second-largest cryptocurrency without needing a wallet or navigating through different crypto exchanges. 

Don’t forget that ETFs are investment instruments that leverage an arbitrage mechanism to maintain the net value of their underlying assets. Away from the Ethereum ETFs, investors and enthusiasts alike are anticipating the implementation of the Ethereum Pectra upgrade that will go live between the later stages of 2024 and early 2025. 

By that, Ethereum developers are already gearing up for the implementation following the success of the Ducan upgrade. In this article, we will dissect what the Pectra upgrade is all about, outlining some key components of one of the most anticipated enhancements to the Ethereum network. 

Explaining Components of Pectra Upgrade

The Pectra upgrade is a combination of the Prague and Electra upgrades to improve the efficiency of the Ethereum network. Also, the upgrade focuses on enhancing users’ experience by simplifying some functionality of Ethereum. 

To an extent, the Pectra upgrade is an essential one to the Ethereum network most especially how it involves the developer community. With their support, the second-largest blockchain network is aiming for the next level by improving security and scalability. 

Furthermore, the upgrade will come with more than 25 Ethereum improvement proposals (EIPs). Some of these are EIP-3074, EIP-2537, EIP-6110, EIP-7251, and EIP-7702. Each of these EIPs will play a vital role in achieving the goals of the Pectra upgrade. 

Meanwhile, EIP-3074 is one of the proposals that will help users easily manage their Ethereum wallets like MetaMask. The EIP-3074 permits batch transactions which implies that users can sign off multiple transactions at once. 

With the improvement proposal, every transaction will be grouped, allowing smart contacts to execute using in a sole signing. Therefore, with the EIP-3074, users can save time and gas fees. 

Similarly, the EIP-3074 comes with a private key recovery system that finally silences the fear of losing your assets if you lose access to the wallet. The Ethereum improvement proposal uses invoker contracts thato help users recover their assets while using social recovery methods. 

Concerns Over Slashing Fee On Ethereum 

Moving forward, the EIP-7251 is another top proposal that focuses on addressing the growing number of validators. Recall that in April, the number of validators on the network skyrocketed, surpassing 1 million, staking more than 32 million. 

The increasing number of validators on Ethereum has added more burden on the Network. Thanks to the EIP-7251, the network will reduce the number of validators, which in return decreases the overhead cost and boosts staking profit.

Despite the good side of the EIP-7251, there are concerns over the increased maximum effective balance (MaxEB) of validators. The implementation of the proposal will see the validator’s MaxEB move from 32 ETH to 2048 ETH. Nonetheless, the minimum effective balance remains at 32 ETH. 

The fear about this upgrade is how validators may lose more ETH to slashing risks. It is worth mentioning that Ethereum introduced the slashing system as a means of preventing validators from going rogue. The system operates in such a way that the network punishes validators by subtracting their ETH in case of improper validation. 

Before now, the network mostly deducts 1 ETH from validators if the validator fails to validate correctly. Following the increment of MaxEB, validators are concerned that the slashing penalty may increase as the team has yet to address it. 

Conclusion 

In total, the Pectra upgrade comes with 25 EIPs that are devised to support the smooth running and advancement of the Ethereum network. Beyond reasonable doubt, the upgrade is like a window offering enthusiasts and developers alike a glimpse of what the future holds for the network. 

Consequently, additions like enhanced security, advanced user experience, and reduced gas fees are welcome developments that will further solidify Ethereum’s status as a force to reckon with in the crypto and blockchain landscape. 

On the flip side, the newly introduced staking limit for validators and social recovery features has raised concerns about some potential dangers the improvement comes with.