Ethereum Pectra Upgrade Boosts Scalability and Stablecoin Gas Fees

The Ethereum Pectra upgrade is a significant milestone in the development of the Ethereum network, combining two separate upgrades: the Prague upgrade and the Electra upgrade. The Prague upgrade focuses on changes to the network’s execution layer, while the Electra upgrade impacts the consensus layer. These upgrades, when combined, are collectively referred to as the “Pectra” upgrade.

The Pectra upgrade follows the Dencun upgrade, which occurred in March 2024. Dencun was a hard fork designed to lower transaction fees for layer-2 solutions and improve Ethereum scalability. The Pectra upgrade marks a new phase in Ethereum’s development roadmap, with the successful deployment on the Sepolia test network on March 5 at 7:29 am UTC. This completion of the second test phase achieved a flawless proposal rate, despite a previous setback on the Holesky test network due to a misconfiguration among validators.

Test networks like Sepolia and Holesky allow developers to test new upgrades in a controlled environment before applying them to Ethereum’s main network. With the Sepolia test phase complete, Ethereum moves one step closer to deploying Pectra on the mainnet, although Holesky still requires further work to resolve existing issues related to “correlation penalties” and “validator balance drains.”

The Pectra upgrade introduces crucial improvements, including enhanced scalability and the ability to pay gas fees with stablecoins, with further advancements expected by 2026. The upgrade is scheduled in two phases. Phase 1, set for mid-March 2025, includes doubling layer-2 blob capacity, allowing gas fees to be paid using stablecoins like USDC and Dai, and increasing validator staking limits. Phase 2, expected in late 2025 or early 2026, will introduce Verkle trees and Peer data availability sampling (PeerDAS) to enhance data storage efficiency and scalability.

Pectra brings several key improvements to Ethereum, including improved scalability, reduced transaction fees, smart accounts, and enhanced security. These enhancements pave the way for more efficient transactions and future innovations on the Ethereum network. The upgrade introduces 11 key Ethereum Improvement Proposals (EIPs) that enhance scalability, staking flexibility, and user experience. These EIPs include increasing the st