Binance Research: What Does the Petrca Upgrade Mean for Ethereum?

Author: Binance Research

Compiled by: Deep Tide TechFlow

Pectra upgrade is now live on the Ethereum mainnet.

Gain insight into the core improvements of this upgrade, its significance for the Ethereum development roadmap, and our views on its potential impact on the accumulation of $ETH value.

1/ What is Pectra?

The Pectra upgrade focuses on staking, data blobs, and account abstraction, mainly involving the following important EIPs (Ethereum Improvement Proposals):

EIP-7251: Increase the maximum effective balance (MaxEB) from 32 ETH to 2,048 ETH

EIP-7691: Increase the data block capacity from 3/6 to 6/9

EIP-7702: Upgrading Externally Owned Accounts (EOA) to Smart Contract Wallets

2/ EIP-7251 - Increase the Maximum Effective Balance (MaxEB) for Staking

The number of validators has now exceeded 1 million, putting significant pressure on the Ethereum Layer 1 (L1) network. By raising the maximum effective balance limit to 2,048 ETH, large staking service providers can consolidate their validator nodes, whereas previously the staking limit for each node was 32 ETH.

3/ EIP-7691 – Increase target and maximum block size capacity

Since the Dencun upgrade, the average number of data blocks has reached the target value, which means that during network congestion, the second layer network (L2) is unwilling to pay higher fees for data availability (DA). Increasing the data block capacity should allow more data to be uploaded to L1 while keeping costs low.

4/ EIP-7702 – Transforming EOA into smart contract wallets

EIP-7702 allows externally owned accounts (EOA) to temporarily set executable smart contract code only during the transaction period, thereby supporting features such as bundle transactions, gas fee sponsorship, social recovery, and providing more flexibility.

5/ What is the next step for Ethereum?

After the Pectra upgrade, the Fusaka upgrade is expected to be launched by the end of 2025. This upgrade will further advance Ethereum's layer 2 scaling roadmap by increasing the data block capacity and potentially introducing upgrades to the EVM (Ethereum Virtual Machine).

6/ Fusaka Upgrade Plan

PeerDAS: Introduced in EIP-7594, PeerDAS will be an important step towards achieving complete Data Availability Sampling.

Ethereum Object Format: Aims to further enhance the developer experience and user security.

7/ The Future of Ethereum

Despite Ethereum's commitment to a Layer 2 scaling roadmap, questions remain regarding its long-term competitiveness as a data availability layer and how to achieve sustainable value accumulation.

8/ Ethereum as a data availability layer

Even with the full implementation of Danksharding, Ethereum will still lag behind its peers in terms of raw data throughput. However, as the most secure network with over 1 million validators, Ethereum's security is crucial in data correctness verification.

9/ Value controversy of $ETH

The proposal regarding the repricing of data blocks (blobs) in the market may drive Layer 2 networks (L2) towards cheaper alternatives, while expecting L2 to support ETH through partial fees is overly subjective. Ethereum-based Rollups have the greatest support for value accumulation, but are currently not a priority in the roadmap.