Easy to understand Ethereum Pectra upgrade

The Ethereum Pectra Upgrade is another important milestone following the Dencun upgrade in March 2024 (which significantly drops Layer 2 fees), containing 11 Ethereum Improvement Proposals (EIPs).

Unlike previous upgrades (such as Shapella allowing for staking ETH withdrawals), Pectra does not have a single prominent goal, but rather improves network performance comprehensively through multiple technological optimizations, laying the foundation for future upgrades (such as Fusaka).

Ethereum Upgrade Review

Since its mainnet launch on July 30, 2015, Ethereum has undergone multiple significant hard forks and soft fork upgrades, each aimed at improving the network's performance, security, scalability, or functionality.

The following is a review of the major 15 upgrades of Ethereum in the past, covering key hard forks and important milestones, summarized in chronological order:

Homestead (2016)

Ethereum's first major hard fork enhances network stability, optimizes smart contract functionality, and lays the foundation for DApp development.

Tangerine Whistle (2016)

Emergency hard fork to fix DoS vulnerability, adjust Gas costs, and enhance network attack resistance.

Spurious Dragon (2016)

Optimize security by introducing chain ID to prevent replay attacks, and clean up invalid accounts to drop storage burden.

Byzantium (2017)

Support for ZK-SNARKs and REVERT opcode, enhancing privacy features and smart contract efficiency.

Constantinople (2019)

Introducing CREATE2 and bitwise operation opcodes, drop Gas costs, and promote the early development of DeFi.

Istanbul (2019)

Optimize ZK-SNARKs performance, drop Calldata costs, and enhance Layer 2 and cross-chain compatibility.

Muir Glacier (2020)

Delay the difficulty bomb, stabilize the PoW block time, and secure development space for the PoS transition.

Berlin (2021)

Optimize the Gas mechanism, introduce access lists and Gas payment on behalf, paving the way for EIP-1559.

London (2021)

Introduce the EIP-1559 reform of the fee market, enabling the ETH burn mechanism, bringing potential deflationary effects.

Arrow Glacier (2021)

Delay the difficulty bomb again to ensure the stability of the PoW network and prepare for the merge.

Gray Glacier (2022)

The last delay of the difficulty bomb ensures the smooth operation of the network before the merge.

The Merge (2022)

Also known as the "Ethereum Merge", it switches from PoW to PoS, dropping energy consumption by 99.95% and laying the foundation for scalability upgrades.

Shanghai/Capella (2023)

Also known as the "Shanghai Upgrade", it enables the withdrawal of staked ETH, enhances liquidity, and promotes the growth of staking participation rate.

Cancun/Deneb (Dencun, 2024)

Also known as "Cancun Upgrade", it introduces EIP-4844 and Blob storage, significantly dropping Layer 2 fees, boosting the Rollup ecosystem.

Pectra (2025)

Achieve account abstraction, increase staking limits and Blob capacity, optimize user experience and Layer 2 scalability.

About the Pectra Upgrade

Pectra Upgrade Background

Pectra is another important milestone following the Dencun upgrade in March 2024 (which significantly drops Layer 2 fees), including 11 Ethereum Improvement Proposals (EIPs). Unlike previous upgrades (such as Shapella which allowed staking ETH withdrawals), Pectra does not have a single prominent goal, but rather comprehensively enhances network performance through multiple technical optimizations, laying the groundwork for future upgrades (such as Fusaka).

User Experience Upgrade - Account Abstraction (EIP-7702)

The technical protocol EIP-7702 in the Pectra upgrade introduces a mechanism that allows EOA accounts to temporarily or permanently upgrade to smart accounts through additional smart contract code.

The main supported features include:

• Custom Logic: Supports flexible security policies and transaction validation rules
• Batch Authorization + Transaction: Execute multiple operations (such as authorization + exchange) with a single signature.
• Fee Payment on Behalf: Third-party payment of Gas fees, or payment using stablecoins.

EIP-7702 drops the entry barrier for new users, improves DApp interaction experience, and promotes wallet innovations, such as supporting biometric and stablecoin Gas payments. However, true comprehensive application requires attention to the actual application effects of EIP-7702. Undoubtedly, EIP-7702 will bring more possibilities to the Ethereum ecosystem!

Validator Staking Optimization - EIP-7002

The technical protocol EIP-7002 in the Pectra upgrade introduces a withdrawal mechanism triggered by the execution layer, allowing addresses with non-validator keys to initiate exits, dropping the reliance on trust in delegated staking.

EIP-7002 Specific Improvements:

• Support Decentralization: Enhance the flexibility of staking pools (such as Lido, Rocket Pool), allowing users to exit autonomously, promoting a decentralized ecosystem. Exit Credential: The validator's exit permission is bound to the execution layer address, and the user can trigger the exit by signing the transaction with the private key, without relying on the validator key.
• Reduce Trust Dependency: Users directly control the exit of delegated staking, drop the trust risk on the staking pool, and enhance fund security.
• Simplified Operation: Initiate withdrawal through standard Ethereum transactions, making the operation easy and suitable for non-technical users and institutions.

EIP-7002 will immediately improve the exit experience for stakers, especially for users utilizing services like Lido and Rocket Pool, and is expected to drive further growth in staking participation rates.

Enhance Layer 2 scalability (EIP-7691 and EIP-7623)

EIP-7691 and EIP-7623 are two key Ethereum Improvement Proposals for Layer 2 scalability in the Ethereum Pectra upgrade, aimed at reducing Layer 2 network transaction fees and improving throughput by optimizing Data Availability (DA) and block resource allocation.

Specific Impact:

• Increase Throughput: Rollup TPS theoretically doubles (e.g., Arbitrum increases from 100 to 200), depending on optimization.
• drop Layer 2 fees: Blob capacity doubled (6/9) increases data availability, with expectations to further drop Rollup fees from Optimism, Arbitrum, etc. from $0.01 to approximately $0.005, stabilizing fee fluctuations in the independent Blob Gas market.

The Pectra upgrade significantly enhances Ethereum's user experience, efficiency, and scalability through account abstraction, staking optimization, blob capacity improvements, and cryptography improvements. At the same time, Pectra is part of Ethereum's "Surge" phase, which lays the groundwork for subsequent Fusaka upgrades (introducing PeerDAS, Verkle trees, etc.), with the long-term goal of achieving stateless clients and higher throughput. Next, Vitalik's proposed RISC-V technology could further revolutionize the efficiency of smart contract execution and help Ethereum cope with competition.