What's In The Ethereum's Prague/Electra Upgrade?
The Prague/Electra upgrade - Pectra for short, scheduled for early 2025, is one of the most significant updates to Ethereum since their shift to Proof of Stake (PoS). While much of the discussion centers on Ethereum, this upgrade also has broader implications for developers, investors, and the blockchain industry as a whole.
In this blog, let’s overview what the Prague/Electra upgrade brings and how it might affect the ecosystem.
The Upgrade is Split into Two Phases
The Pectra upgrade was initially planned as a single update. However, developers decided to split it into two parts to make the rollout more manageable and reduce potential risks.
Phase 1 (Early 2025): The first phase will focus on practical improvements such as account abstraction and validator enhancements. These changes aim to improve network efficiency, user experience, and staking rewards.
Phase 2 (Expected in 2026): The second phase will introduce more complex technical upgrades, including the EVM Object Format (EOF) and further improvements to Layer 2 solutions, such as PeerDAS.
What’s New with Pectra?
1. Account Abstraction
One of the most user-friendly changes coming with Pectra is account abstraction. Currently, Ethereum users need to hold ETH in their wallets to cover gas fees when interacting with the network, whether it’s sending tokens, trading NFTs, or using decentralized applications (DApps). With account abstraction, users will be able to pay gas fees using other tokens like USDC or DAI. Additionally, third-party services will have the ability to sponsor gas fees in certain cases, reducing costs for users and streamlining Ethereum’s usability.
2. Enhanced Smart Contract Efficiency
Pectra includes several Ethereum Improvement Proposals (EIPs), like EIP-7692, which will make the Ethereum Virtual Machine (EVM) more efficient. This will improve how smart contracts are processed, reducing both the cost and complexity for developers and users alike. Faster execution times and lower deployment costs are among the benefits, making the platform more streamlined.
3. Improvements for Validators
Under Ethereum’s PoS system, validators secure the network and confirm transactions. To become a validator, users must stake a minimum of 32 ETH. However, any additional ETH staked beyond that amount doesn’t offer extra rewards. The Prague/Electra upgrade introduces two major improvements: flexible staking withdrawals (EIP-7002) and an increase in the staking cap from 32 ETH to 2048 ETH (EIP-7251). These changes will streamline the staking process, make larger staking operations more efficient, and help consolidate validator nodes, reducing network strain.
4. Verkle Trees for Better Data Handling
Verkle trees, a new data structure introduced in the upgrade, will improve Ethereum’s ability to store and manage blockchain data. This upgrade will allow Ethereum to process transactions more quickly, lower costs, and reduce the data load on nodes. Although the technical details may sound complex, the real-world benefit is clear: faster transactions and more scalable blockchain operations.
5. Layer 2 Solutions and PeerDAS
Layer 2 solutions, such as Arbitrum and Optimism, play a critical role in reducing congestion on the Ethereum network by handling transactions off-chain. Prague/Electra will enhance these systems by introducing Peer Data Availability Sampling (PeerDAS), a technology that makes data management on Layer 2 networks more efficient. This improvement will lead to faster, cheaper transactions for Ethereum-based applications and users performing frequent transactions.
Potential Risks
The Pectra upgrade, which will impact both Ethereum's execution and consensus layers, comes with known risks. These are considered unlikely but still worth addressing. One concern involves the possibility of overwriting an existing account, though current safeguards reduce the likelihood of serious issues. Developers are confident that these vulnerabilities will be addressed before the upgrade is fully implemented, and an associated Ethereum Improvement Proposal (EIP) will help lock in post-fork rules to further mitigate risks. For most users, this isn't a major worry.
However, a report from Liquid Collective and Obol Labs has flagged some important risks, particularly in areas like client, operator, and cloud diversity. The report points out that a major failure in a dominant client could lead to severe penalties and instability within the network. It also stresses the need for a diverse set of operators to avoid potential single points of failure.
The report further highlights the importance of having a global distribution of validators and cloud providers. Recent outages underscore the necessity of strengthening this aspect, with Distributed Validator Technology (DVT) being recommended as a solution to reduce these risks.
Long-Term Benefits
While some changes will be noticeable right away, the Pectra upgrade is more about laying the groundwork for Ethereum's future. By making the network more efficient and scalable, Pectra positions Ethereum to handle a growing number of users and businesses in the years to come.
The introduction of Verkle trees and the enhancements to Layer 2 technologies will allow Ethereum to support more transactions at lower costs, which is critical as the platform continues to expand.
The Future Forward
The Pectra upgrade marks a step forward for Ethereum, paving the way for better scalability and efficiency. With features like Verkle trees and enhanced Layer 2 solutions, Ethereum will be able to handle more transactions at lower costs, ensuring it’s ready to meet growing demand.
As an Ethereum Foundation grantee, we’re excited to contribute to Ethereum’s progress and the whole Ethereum community.
About Orochi Network
Orochi Network is the world's first zkDA Layer, recognized by the Ethereum Foundation. By leveraging Zero-Knowledge Proofs (ZKPs), Orochi ensures data integrity, security, and interoperability, empowering developers with the tools to overcome the limitations of on-chain execution and scalability in Web3. At the core, Orochi offers the world's first verifiable database designed for enterprises, AI/ML, zkML, zkVMs, verifiable computation, Web3 applications and more.
