"Ethereum's Pectra Upgrade Stumbles on Testnet: Finality Fails, Network Stability at Risk"

Ethereum's latest upgrade, Pectra, encountered a setback on Monday when it failed to finalize properly on the Holesky testnet. The test, which activated at 4:55 PM ET, could not achieve finality, according to data from the Beacon Chain. This issue emerged as developers began testing a package of 11 protocol improvements, representing Ethereum's most significant update in almost a year.

Finality is a crucial concept in Ethereum, ensuring that transactions become irreversible after about 13 minutes. Without finality, the network cannot guarantee that transactions won't be changed or reversed. Technical experts pointed to problems with execution clients as the main cause of the issue. Georgios Konstantopoulos, chief technology officer at crypto investment firm Paradigm, noted that the bug was limited to execution clients that "forgot to add the correct deposit contract address."

Joshua Cheong from Mantle Network, an Ethereum Layer-2 protocol, explained that the issue centered on "how deposit contract addresses were handled by these clients." This led to network instability because the Pectra upgrade moves deposit tracking from the Consensus Layer to the Execution Layer. The cause was traced to configuration errors in some execution layer clients that disrupted the hash verifications needed for withdrawals and deposits, which are critical for the network to function properly.

Despite the setback, many experts noted that finding such bugs is exactly why testnets exist. "Holesky and other testnets exist to find issues," Konstantopoulos stated, highlighting the value of testing before changes reach the main Ethereum network. The Ethereum Foundation has planned the next phase of testing on the Sepolia testnet for March 5 at 7:29 AM UTC. Only after both testnet deployments succeed will developers choose a date for activating Pectra on the mainnet.

Pectra contains several key improvements that users have been waiting for. The headline feature is EIP-7702, drafted by Ethereum co-founder Vitalik Buterin. This change allows wallets to temporarily act as smart contracts during transactions, enabling features like batch operations and gas fee sponsorships without permanent changes to accounts. Another major change is EIP-3074, which enhances account abstraction by allowing externally owned accounts to execute batch transactions and sponsored gas payments.

For validators who help secure the network, Pectra brings a major change