Ethereum's Next Upgrade, 'Pectra,' Could Include Relief for Institutional Stakers, Wallet UX Improvements (2024)

Ethereum developers, fresh off the successful Dencun upgrade, which enabled a major change to make it cheaper to transact on layer-2 blockchains, are moving ahead in planning the blockchain's next improvements.

The contents of the next upgrade, "Pectra," are nowhere near finalized, but developers have previously said their aim with the upgrade will be to ship it while simultaneously working on the chain's next upgrade.

“The idea with Pectra is to try and find a bunch of small wins that we can get relatively quickly while we prototype the larger stuff,” Tim Beiko, protocol support lead at the Ethereum Foundation, told CoinDesk in an interview on The Protocol podcast

Attendees at Thursday's Etheruem All Core Developers call – a bi-weekly meeting of the blockchain's primary developers – signaled that Pectra is likely to include Ethereum Improvement Proposal (EIP) 3074, a proposed set of code changes for improving the user experience (UX) of Ethereum wallets. Specifically, the proposal will allow users to batch transactions and sign off on them all at once.

Another one of the main changes likely to occur in Pectra will be a lift to the staking limit for validators, from 32 ETH to 2,048 ETH – a 64-fold increase. That proposal, known as EIP 7251, would allow large staking providers, like Coinbase or Lido, to consolidate their validators operating the Ethereum blockchain – while allowing them to avoid constantly creating new validators every time they have another 32 ETH to stake.

According to Dune Analytics, over 1 million validators are currently operating the Ethereum network, which has led to concern over excessive latency. Developers have been looking for ways to slow the rate at which new validators enter the system – potentially bogging it down. EIP 2751 is pitched as a way to lighten the operational load for larger stakers, consolidate the number of validators on the blockchain, and allow staking providers to deploy less resources to staking and validating.

The name "Pectra" is a portmanteau of two simultaneous upgrades happening on the different layers of the blockchain. The execution layer, where protocol rules are enforced, will undergo the "Prague" upgrade, and the consensus layer, which ensures that blocks are validated, will go through the "Electra" upgrade.

Ethereum developers are known for Brangelina-ing their upgrades, like the previous one where the simultaneous Deneb and Cancun upgrades were referred to as “Dencun,” (and “Shapella” prior to that.) The Ethereum naming convention follows the different cities that Devcon took place in for the execution layer, and for the consensus layer, it follows an alphabetical order of the name of stars.

Other EIPs for consideration include triggering validator withdrawals from smart contracts, adding a code change known as BLS precompile, and removing the deposit window. These are relatively small changes to the network for the developers to work on.

The upgrade following Pectra will include long-awaited "verkle trees" – a new type of data system designed to help Ethereum nodes store large amounts of data.

Beiko said developers would aim to push Pectra out sometime at the end of 2024, maybe early 2025. “It's going to be a relatively small upgrade. The reason for that is that it allows us to work on two forks in parallel. We are working on Verkle trees and that transition,” Beiko said. “We are working on that but it's going to take more than a year. So in the meantime we have bandwidth to work on other small wins.”