Gate.io Blog Ethereum's Pectra Upgrade: What’s New on Gas Fees & Staking

Ethereum's Pectra Upgrade: What’s New on Gas Fees & Staking

31 October 10:45

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## [TL; DR] 
After the <a href="/id/price/ethereum-eth" target="_blank" class="blog_inner_link">Ethereum</a> Pectra upgrade validators may stake between 32 ETH and 2,048 ETH.

The <a href="/id/price/ethereum-eth" target="_blank" class="blog_inner_link">Ethereum</a> accounts will act like smart contracts that can perform some specialized functionalities.

The team may launch the Pectra upgrade series in 2025 and 2026.

## Introduction
<a href="/id/price/ethereum-eth" target="_blank" class="blog_inner_link">Ethereum</a> is one of the leading blockchains that has launched several upgrades during the past years. Yet still, it has more other blockchain improvements to make between now and 2026. The developers launched [Dencun in March](https://www.gate.io/learn/articles/an-in-depth-analysis-of-the-post-dencun-upgrade-era-data-and-investment-perspectives/2498 "Dencun in March") and [Shapella in 2023](https://www.gate.io/learn/articles/all-you-need-to-know-about-the-ethereum-shapella-upgrade/518 "Shapella in 2023"). The next  upgrade is Pectra which will be launched either this year or in early 2025. This improvement will address some of the pressing challenges the Ethereum community has been facing.

## Ethereum’s upcoming Pectra upgrade - Brief Intro
The Pectra upgrade [comes a few months after the launch of “Dencun](https://www.gate.io/learn/articles/ethereum-pectra-the-next-major-upgrade/4407 "comes a few months after the launch of “Dencun"),” an amalgamation of the Deneb and [Cancun upgrades](https://www.gate.io/learn/articles/overview-of-ethereum-cancun-upgrade/2122 "Cancun upgrades"), which took place in March 2024. It aimed to lower transaction fees for layer-2 blockchains and improve the scalability of the Ethereum blockchain. Like Dencun, Pectra combines two upgrades - the Prague upgrade and the Electra upgrade. Pectra is likely to go live during 2025. This upgrade is targeted at improving the performance of the consensus layer and the execution layer. Although it has several proposals some of them will be implemented during the second phase of Pectra.

## Pectra Upgrade: A Two-Part Series
The Ethereum developers have split the [Pectra upgrade](https://www.gate.io/learn/articles/interpretation-of-pectra-the-next-upgrade-of-ethereum/3298 "Pectra upgrade") into two series due to the large number of essential aspects it aims to resolve. It might become a very complex task to work on all the proposals at one goal. As a result, the developers will  work on the first part this year before tackling the other one in 2025. The Ethereum Pectra upgrade key issues include EIP-7702, earmarked to eliminate the use  of ETH-only gas fees,  and (EIP-7251), focused on restructuring staking rewards for Ethereum validators.

## EIP-7702:  Elimination of ETH-only gas fees 
The Pectra Upgrade EIP-7702 is designed to improve the performance of Ethereum digital wallets by making them safer and easier to use. In fact, the upgrade will result in account abstraction, meaning that they will function like smart contracts. Thus, this will eradicate some of the challenges which the users are currently facing. For instance, currently crypto users need to keep ETH to use as gas fees. This is because ETH is required when Ethereum wallets are interacting with decentralized applications.

However,  after the Pectra Upgrade Ethereum wallet users can use other assets for paying transaction fees. For example, they may use USDC or DAI. So, the token being transferred may determine the asset used to pay the gas fees. This will make the network very user-friendly. Since the users will have more control on how their wallets will operate they may be able to authorize some functions. As an example, they can conduct batch transactions or enable another Ethereum wallet account to pay for a certain ETH gas fee.

One benefit of EIP 7702 is the capability of the users to have more control on the functionalities of the Ethereum wallets. For instance, the users will be able to use their accounts to deploy and manage various smart contracts. This will simplify the way they interact with different decentralized applications (DApps). Such functionalities will eliminate the need for Ethereum users to own multiple accounts. Overall, EIP 7702 will give the users control over their account activities as well as enhance the security of their transactions.

## EIP-7251: Enhancements in Staking Rewards for Validators
EIP-7251 will benefit Ethereum stakers and validators in various ways. After the Ethereum Pectra upgrade there will be an adjustment to the validators staking amount and rewards. Specifically, each validator will be able to stake between 32 ETH and 2,048 ETH and receive proportionate staking rewards. This development enables some validators to consolidate their staked ETH into fewer accounts. Therefore, this will reduce the number of Ethereum validators.

Read also: [Semantics of Staking 2: Re-staking](https://www.gate.io/learn/articles/semantics-of-staking-2-re-staking/2026 "Semantics of Staking 2: Re-staking")

EIP-7702 will enable the validators to earn commensurate staking rewards from the locked ETH. Currently, the validators who have staked more than 32 ETH only earn staking reward for 32 ETH. To illustrate an investor who has staked 48 ETH gets a staking reward for 32 ETH only. That is a big discrepancy which the EIP-7702 will address. Generally, this should motivate many Ethereum investors to stake more ETH than they can currently do. What this also means is that large validators will be able to operate fewer nodes in the near future than now.

It is also important to note that the successful launch of EIP-6110 and EIP-7002 will lead to fully automated and permissionless ETH staking pools.  In other words, the system will accept all the validators that meet the preset conditions of a staking pool such as a minimum of  32 ETH. This is different from the current system where some employees manually perform some tasks such as depositing and withdrawing funds.

## The Benefits Derived From  Ethereum Upgrades
The Ethereum Pectra will bring many benefits to the general users and investors. For example, account abstraction will enable the users to interact smoothly with various decentralized applications. Also, the users will be able to pay the gas fees using different digital assets. That will eliminate the need for the users to hold ETH in their accounts for gas fees. The customized security options will likely improve the safety of digital assets on the Ethereum network.

The stakers will likely earn more from their staked ETH. This is because the solo stakers will be able to stake more than the required minimum of 32 ETH.  In addition, they will get staking rewards which are proportionate with the amount they have locked. Similarly, the fact that the stakers may stake between 32 and 2,048 will reduce the number of validators. A decrease in validators will improve the performance of the Ethereum network . The reason is that too many validators slows down  the network as there is a high level of peer-to-peer messaging. Thus, through consolidating validators the network becomes less costly and more efficient than it is now.

The success of the upcoming Ethereum updates may result in a rise in network activity which may lead to more funds inflow in the ecosystem. In addition, that may also result in positive market sentiment which can lead to future <a href="/id/price/ethereum-eth" target="_blank" class="blog_inner_link">ETH crypto</a> price increases. However the possibility of an <a href="/id/price/ethereum-eth" target="_blank" class="blog_inner_link">ETH price</a>  rise will likely depend on how the upgrades improve the Ethereum blockchain technology and the  investors’ perception of the development.

## Conclusion 
The Ethereum Pectra upgrade will likely bring many benefits such as commensurate return on staked ETH. Also, the Ethereum wallets will act as smart contracts which will enable the users to process batch transactions and deploy some dApps. The users will be able to pay gas fees using different [cryptocurrencies such as DAI](https://www.gate.io/learn/articles/what-is-dai/178 "cryptocurrencies such as DAI") and USDC. Finally, the consolidation of validators may lead to a more efficient Ethereum network.

## FAQs on Ethereum Pectra Upgrade
### What is Ethereum Prague upgrade?
The Ethereum Prague upgrade is a hard fork for the Ethereum blockchain designed to bring changes to the network’s execution layer. For example, it will introduce sharding to improve the blockchain’s scalability and efficiency.
### What is Pectra Ethereum?
Pectra Ethereum is an Ethereum blockchain hard fork which is designed to bring changes to the consensus layer. The aim of this upgrade is to improve the network’s scalability, security and efficiency.
### What is the Ethereum upgrade 2025?
Pectra is an Ethereum upgrade that will be launched in 2025. It is designed to bring changes to the blockchain’s consensus layer in order to improve its scalability, efficiency and security.
### What is an Ethereum upgrade?
An Ethereum upgrade is a change of how its key features or components function to improve the network’s performance. For example, the developers are working on launching some upgrades that improve the performance of the Ethereum consensus layer and execution layer.

<div class="blog-details-info">
<div>Author: Mashell C., Gate.io Researcher
<div class="info-tips">\*This article represents only the views of the researcher and does not constitute any investment suggestions.
<div>\*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.
</div>

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TL_ DR

Introduction

Ethereum’s upcoming Pectra upgrade - Brief Intro

Pectra Upgrade: A Two-Part Series

EIP-7702: Elimination of ETH-only gas fees

EIP-7251: Enhancements in Staking Rewards for Validators

The Benefits Derived From Ethereum Upgrades

Conclusion

FAQs on Ethereum Pectra Upgrade

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