Ethereum's Pectra Upgrade Set for May 2025, Boosting Scalability and Security
2min read Ethereum developers have officially announced that the Pectra upgrade mainnet will launch on May 7, 2025. This upgrade is built around 11 Ethereum Improvement Proposals (EIPs) and aims to enhance several key areas, including scalability, wallet functionality, and transaction processing. The Pectra upgrade merges two previous upgrades, Electra and Prague, into a single release, providing a more efficient upgrade that will advance the network's scalability, security, and user experience.
One of the major changes introduced by the Pectra upgrade is the addition of smart accounts, which will provide Ethereum wallets with greater recovery options in case users lose access. This change will improve the overall Ethereum experience by making wallets easier to manage, especially for non-technical users. Additionally, the upgrade will introduce EIP-7702, adding a new transaction type to Ethereum (type 4) that allows Externally Owned Accounts (EOAs) to behave like smart accounts, enabling approving and swapping in a single transaction.
The Pectra upgrade will also significantly impact Ethereum’s staking model and scalability. EIP-7251 will raise the staking cap from 32 ETH to 2,048 ETH, opening the door for more institutional involvement in Ethereum staking. This increase in the staking cap will bring more liquidity into the Ethereum network, as institutional players can now participate more meaningfully, adding stability to the network. Meanwhile, EIP-7691 will focus on scalability by increasing the maximum blob count, directly improving the performance of rollups. Rollups have become vital for Ethereum’s growth, allowing transactions to be processed faster and at lower costs while still relying on Ethereum’s security.
Despite these advancements, Ethereum’s price has continued to decline. Since the start of the year, the ETH price has dropped by 45.4%, currently trading at $1,778. This decline can be linked to increasing competition from other smart contract platforms and broader market trends. The Crypto Fear and Greed Index is at 28, signaling a widespread decline in investor sentiment. This shift in sentiment came in the wake of former U.S. President Trump’s announcement of sweeping tariffs, known as the “Liberation Day” plan, which introduced a 10% baseline tariff on all imports, with even higher rates for certain countries. The announcement rattled global markets, including the cryptocurrency sector, as the entire market capitalization dropped by 4%.
Despite the continuous decline, there may be hope for Ethereum. A crypto analyst and trader pointed to the $1,200 price level as a key support zone for ETH. If ETH’s price bounces off this level, there may be a potential mid-term rally, with the asset moving toward the $3,400 range, which represents a 283% gain. This potential rebound could coincide with the upcoming Pectra upgrade, which may fuel ETH’s price if it delivers on the promised scalability and other functionality improvements.
