The Ultimate Guide to Ethereum's Pectra Upgrade

The next big Ethereum upgrade is on the horizon. After delays due to configuration issues during the Holesky and Sepolia testnet activations, Pectra is now scheduled to go live on mainnet on May 7th. Coinbase is actively preparing for the upgrade and will implement the necessary updates once Pectra rolls out. This article provides an overview of Pectra and breaks down the Ethereum Improvement Proposals (EIPs) that will have the greatest impact on the ecosystem and staking. 

What Is Pectra? 

The first major upgrade since Dencun in March 2024, Pectra comprises the Prague execution layer hard fork and the Electra consensus layer upgrade. It is the most ambitious Ethereum upgrade yet, with more EIPs (11) than any previous upgrade. Pectra will implement significant improvements to validator flexibility, network scalability, user experience, and execution efficiency. Below is the comprehensive list of proposals scheduled for inclusion in Pectra.

• EIP-2537: Precompile for BLS12-381 curve operations

• EIP-2935: Save historical block hashes in state

• EIP-6110: Supply validator deposits on chain

• EIP-7002: Execution layer triggerable withdrawals

• EIP-7251: Increase the MAX_EFFECTIVE_BALANCE

• EIP-7549: Move committee index outside Attestation

• EIP-7623: Increase calldata cost

• EIP-7685: General purpose execution layer requests

• EIP-7691: Blob throughput increase

• EIP-7702: Set EOA account code

• EIP-7840: Add blob schedule to EL config files

Major Ecosystem Changes

The following proposals will have the most significant impact on user experience, staking, and network scalability. 

EIP-7702: Set EOA account code - Biggest wallet and UX improvement 

Primarily impacts: wallets, user experience, dapps

This EIP introduces a new transaction type that will allow externally owned accounts (EOAs) to temporarily act as smart contracts for the duration of a transaction. This will be achieved by enabling EOAs to set and execute smart contract code without permanently converting into a contract account. The change will enable wallets (EOAs) to execute batch transactions, enable sponsored gas payments (meta-transactions), and allow for implementation of custom validation logic.

Why it matters: 

This change will improve user experience, wallet functionality, and gas efficiency by reducing the number of steps required for end-users to interact with DeFi protocols, onchain games, and other dapps. Dapp users will no longer need to leave an application to complete transactions–reducing the likelihood of user drop-off and creating a more seamless onchain experience. The change will bring Ethereum closer to full account abstraction, making the network more flexible, efficient, and user-friendly. 

EIP-7251: Increase the MAX_EFFECTIVE_BALANCE - Biggest staking change 

Primarily impacts: staking efficiency, validator operations and management, staking liquidity and exits

This enables raising the validator maximum effective balance (‘MaxEB’) from 32 ETH to 2,048 ETH. To opt in, validators will need to update their withdrawal credentials to 0x02. The MaxEB change will allow validators to earn rewards on any balance between 32 and 2,048 ETH, giving larger stakers (e.g., institutional investors) and staking providers the ability to consolidate their validators. For 0x02 validators, the auto-sweep of balances (rewards) >32 ETH will change to activating when balances exceed 2,048 ETH, enabling rewards compounding. To mitigate the heightened risk associated with large balances, the initial slashing penalty for validators employing the new MaxEB parameter will be 1/4,096 of their effective balance, in lieu of the current 1/32. The new constant MIN_ACTIVATION_BALANCE will also be introduced to set a formal minimum activation balance of 32 ETH. 

EIP-7251 will also change exit and withdrawal mechanics to prevent large fluctuations in staked ETH. The exit queue will no longer be governed by a churn limit denominated in number of validators per epoch (currently 16). Instead, the total churn per epoch will be based on the amount of ETH to leave the network. Churn will be hard capped at 256 ETH per epoch (~57,600 ETH per day). 

Why it matters: 

The change to MaxEB will enable rewards compounding, as stakers will be able to reinvest rewards into the validator balance until it reaches 2,048 ETH. The ability to consolidate validators will simplify operations and reporting and improve flexibility for stakers and staking operators. Consolidation will also reduce the total number of validators in the network (at least temporarily), helping lower the attestation load and reduce network overhead. This will improve consensus efficiency and staking scalability. 

EIP-7002: Execution layer triggerable withdrawals - Biggest flexibility change for staking

Primarily impacts: validator withdrawals and exits, staking security, control over funds 

Under the current configuration, validator exits and withdrawals can only be triggered from the consensus layer (CL), using a validator’s active key. This EIP will add a new mechanism that will allow validators to manually trigger withdrawals and exits from the execution layer (EL) using their EL (0x01) withdrawal credentials (e.g., via an EOA or smart contract). Under the new system, exit request transactions will be submitted to the EL then processed by the CL (validators will join the exit queue, just like in a CL triggered exit). For withdrawals, requests will be submitted to the EL then included in the EL manual withdrawal queue (which will allow 8 withdrawals per block). This new mechanism will be in addition to, not in lieu of, CL triggered withdrawals and exits.

Why it matters: 

Limiting withdrawal and exit triggering to only a validator’s active key can pose limitations and unnecessary risk. Because active keys sign and perform validator duties, they are hot and can have security vulnerabilities. Withdrawal credentials, on the other hand, can remain cold when used only for withdrawal and ownership operations. Enabling the use of withdrawal credentials for exits and withdrawals will remove absolute reliance on potentially vulnerable active keys. Eliminating this reliance will also reduce trust dependencies for stakers who delegate to providers and will lessen the impact in the event of an active key loss. The change will make Ethereum’s staking model more secure, flexible, and trustless overall. 

EIP-7691: Blob throughput increase - Biggest impact on L2 scalability 

Primarily impacts: rollup performance, network scalability

This EIP will increase blob throughput by raising the target number of blobs per block from 3 to 6 and the maximum from 6 to 9. This proposal builds on EIP-4844 from the Dencun upgrade, which introduced blob transactions. Blob transactions allow rollups to store large amounts of data more efficiently in temporary “blobs” (rather than calldata), significantly reducing gas fees and network congestion. EIP-7691 will allow blobs to accommodate more data in each block, improving data availability for rollups. The blob base fee update mechanism will also be adjusted to ensure that fee changes remain responsive to network usage under the new blob limits. 

• Full blobs: Base fee increases by ~8.2% (currently ~12.5%)

• No blobs: Base fee decreases by ~14.5% (currently ~11.1%)

Note that this change may also impact validators and node operators, as they will need to handle larger blocks with more blobs–potentially increasing bandwidth and storage requirements.

Why it matters: 

Increasing blob throughout will allow rollups to process more transactions efficiently, potentially leading to reduced congestion and improved transaction speeds for users of those networks. With increased data availability, rollups will be able to operate more efficiently, potentially leading to lower gas fees. This change will enhance Ethereum’s capacity to support L2s, thereby improving its scalability. Note that this change is a short-term solution to enhance scalability until more comprehensive solutions are deployed. 

Other Changes That Impact Staking 

These EIPs aren’t as high impact to the broader ecosystem but will impact stakers and validator operators. 

EIP-6110: Supply validator deposits on chain

Primarily impacts: validator activation and deposit time, deposit security 

This will integrate validator deposit functionality directly into Ethereum’s Execution Layer (EL) blocks and eliminate the current Consensus Layer (CL) proposer voting mechanism. 

Why it matters: 

Elimination of Eth1Data polling will significantly decrease deposit processing time–taking it from ~12 hours down to ~13 minutes (assuming no validator queue). Removing reliance on proposer voting will also significantly increase deposit security by eliminating any risk of adversarial behavior. This change will also reduce the engineering and design complexity of CL client software, improving network resilience and efficiency. 

EIP-7549: Move committee index outside Attestation

Primarily impacts: validator performance, network overhead

Ethereum validators are grouped into committees to submit attestations. When a validator signs an attestation, the index field (representing the committee index) is included to indicate which committee the validator was assigned to for the given epoch. Currently, the committee index field resides inside the signed Attestation message. This means that two validators that vote identically but belong to different committees will have different signatures because their index values are included in their signatures. This upgrade will relocate the index field to outside of the signed Attestation message, making it so that identical votes across different committees produce the same signature. 

Why it matters: 

This change will make attestation aggregation and verification more efficient. It will reduce bandwidth and processing overhead for validators, helping them operate more efficiently. Stakers won’t see direct changes (no changes to validator behavior, rewards, or slashing), but validators will benefit from a more optimized consensus process. This should reduce network load and enhance flexibility for staking providers while keeping Ethereum's consensus secure and stable. 

The Road to Mainnet 

Pectra faced initial challenges during testnet deployments, encountering issues on Holesky and Sepolia before achieving full finalization on the new Hoodi testnet. This successful activation resulted in a confirmed May 7th mainnet launch date, pending continued stability during the 30-day monitoring period. 

We continue to follow along closely as we prepare to update our systems for the launch, and will be actively working to ensure a smooth rollout experience for our customers. Follow us on X for more Pectra insights as the launch day approaches.