Ethereum Pectra (short for “Prague-Electra”) update is finally live on mainnet. In this guide we are going to briefly cover why it is so crucial for Ethereum, what makes it the “first upgrade for people” and how it may affect the Ethereum (ETH) price.
Also, we will observe the agenda of Fusaka, the next hotly anticipated Ethereum (ETH) upgrade that is expected to be activated in late 2025.
Ethereum Pectra upgrade goes live on mainnet: Highlights
Activated in May 2025 after months of stress-testing, Ethereum Pectra upgrade is set to make the largest smart contracts platform a better place for developers and users.
- Ethereum Pectra (Prague-Electra) is an upgrade on the Ethereum (ETH) network, which happened in the form of a blockchain-wide hard fork.
- Pectra’s mainnet activation happened May 7, 2025, after months of testing on general and specific testnets.
- Ethereum Pectra implements 11 Ethereum Improvement Proposals or EIPs.
- The most important of them increase blob space to allow further L2 scaling, enlarge maximum staked ETH balance per validator for more flexible scaling and optimize calldata cost.
- The introduction of “Smart Accounts,” i.e., blurring the line between Ethereum on-chain wallets and smart contracts, is the most discussed update associated with Pectra.
While the activation of the Pectra upgrade had no direct effects for the Ethereum (ETH) price, if successful, it can rebuild investors’ credibility in Ether, which is terribly underperforming in the current crypto markets cycle. Also, it gives Ethereum (ETH) a chance to yet again challenge Solana (SOL) as the go-to chain for regular transactions.
What is Ethereum?
Ethereum is a decentralized network (blockchain) first introduced on mainnet July 30, 2015. Created by Canadian programmer Vitalik Buterin and a team including Charles Hoskinson, Gavin Wood and Joseph Lubin, Ethereum was the first blockchain set to power decentralized applications (dApps) via smart contracts, isolated self-executed software programs.
Previous-gen blockchains like Bitcoin, Litecoin or Dogecoin lacked such functionality, which guaranteed Ethereum (ETH) the status of “world computer.” Ethereum Virtual Machine is a global decentralized computational power for a wide range of decentralized applications.
Ethereum played a pivotal role in evolving blockchain beyond cryptocurrency as it paved the path for major verticals like DeFi, NFTs and DAOs, and remains central to innovation in Web3. It was also the first mainstream blockchain that migrated from proof-of-work (PoW) to proof-of-stake (PoS) consensus. In September 2022, it replaced mining by staking as the technology and economic basis of its security and transactions validation.
In the 2022-2025 cryptocurrency cycle, Ethereum (ETH) is heavily underperforming compared to the crypto market benchmark, and against Bitcoin (BTC), its largest competitor. To much criticism from the Ethereum (ETH) community, the ETH/BTC ratio keeps hitting multi-year lows again and again.
What are Ethereum upgrades?
Ethereum upgrades are periodical (one-two every year) network-wide enhancements implemented through hard forks, which are backward-incompatible changes requiring all nodes to update.
These upgrades are set to improve security, scalability and performance of the Ethereum blockchain, and often include major protocol changes and new features. For every upgrade to go live, it is necessary to pass an extensive discussion, a testing phase, activation on all major Ethereum (ETH) testnets and activation on mainnet.
Previously, Ethereum (ETH) upgrades had been monolithic, but then separate hard fork programs were being introduced for the consensus layer and for the validation layer.
Notable upgrades include Istanbul (2019) for gas efficiency, Berlin (2021) for EVM improvements, London (2021), which introduced the EIP 1559 (for the concept of Ethereum Improvement Proposals or EIPs — see below) — dynamic fees model and periodical ETH burn events, and Dencun (2024), which added so-called proto-danksharding to optimize transaction costs for Ethereum’s Layer-2 blockchains like Arbitrum or Optimism.
Each upgrade reflects Ethereum’s continuous evolution toward a more scalable, feature-rich and powerful ecosystem while preserving decentralization and developer-friendliness.
What are EIPs?
Derived from similar instruments in Web2, EIPs or Ethereum Improvement Proposals are design suggestions proposing changes to the Ethereum protocol, standards, or processes.
Each EIP goes through phases: Draft, Review, Final and sometimes Stagnant or Withdrawn. They are discussed and refined by the Ethereum community online, especially within forums like Ethereum Magicians and official platform Ethereum.org. Mostly, veteran Ethereum (ETH) developers, engineers and enthusiasts are contributing to these discussions.
Some notable examples include EIP-20, which introduced ERC-20 token standards (all fungible tokens on Ethereum), EIP 721 and EIP 1155, which standardized non-fungible and semi-fungible tokens. Every hard fork (upgrade) technically represents a combination of EIPs, which are submitted for implementation by the entire network.
Ethereum Pectra: What you should know
Ethereum Pectra is the most ambitious upgrade in post-Merge Ethereum history designed to make the development of the second largest blockchain aligned with the most profound trends of the blockchain segment.
Ethereum Pectra: Date
Like all network-wide Ethereum (ETH) upgrades, Ethereum Pectra underwent multi-phase stress-testing before being submitted for mainnet activation.
- Phase 1. Pectra Devnet — January 2025. Special test network for experiments with EIP-7702 and EIP-7251 activation.
- Phase 2. Holesky Testnet — Feb. 24, 2025. First Ethereum testnet to adopt Pectra. Initial attempt failed while transaction finality was only accomplished by March 10, 2025. The process of bug fixing was accompanied by alerts from the community.
- Phase 3. Sepolia Testnet — March 5, 2025. Multi-client testing of Pectra started successfully.
- Phase 4. Mainnet — May 7, 2025. Pectra was successfully implemented in the first attempt, all nodes responded promptly.
As such, the entire process of Pectra activation took over four months, which is regular for this type of upgrade.
Ethereum Pectra: Core EIPs
Here is the list of 11 Ethereum Improvement Proposals that shaped Ethereum Pectra upgrade’s agenda. Previously, the list of EIPs was even larger, but then the devs decided to drop some of them in the segment of account abstraction. The most important ones are highlighted.
As such, the majority of advancements affect data logistics, economics and performance of Ethereum (ETH) and Layer-2 EVM blockchains running on top of it.
Ethereum Pectra: Motivation
The opportunity to enhance account abstraction, to make ETH staking more flexible for validators and to increase blob data space are the three pillars of Ethereum (ETH) developers’ motivation to activate the Pectra upgrade.
- With advanced account abstraction, on-chain Ethereum (ETH) wallets can work exactly like smart contracts. For instance, owners of wallets will be able to enable gas payments in cryptocurrencies besides ETH, automate transfer authorization and so on.
- With more flexible and performant ETH staking, it becomes economically rational for validators to increase their commitment to keeping the Ethereum (ETH) blockchain secure and operable.
- With increased blob size, Ethereum-based L2s will be able to process more data, work more cost-efficiently and make dApps faster.
As such, economic rationality, a performance increase and better data logistics pushed the developers to adopt Pectra on Ethereum (ETH).
ETH price and Ethereum Pectra upgrade: Two scenarios
First of all, we should note that no Ethereum (ETH) upgrade directly affected the ETH price immediately. Even the most radical changes such as EIP 1559 become visible only in the long run.
Also, all exact predictions about how the Pectra upgrade affects the ETH price are highly likely speculations and should be treated as such. Traders, investors and stakers should always stay cautious.
Ether price: Bullish
If successful, Ethereum Pecra could trigger three major catalysts for the Ethereum (ETH) price in the long term. First, its radical blob data increase makes Ethereum (ETH) an even more attractive foundation layer for L2 blockchains, which means constant activity and liquidity inflows.
Then, its change of maximum stake per validator and other changes in validation progress makes ETH on-chain staking more flexible, which, in turn, is set to yet again accelerate the competition there and mitigate selling pressure.
Also, the introduction of smart accounts is expected to make Ethereum (ETH) more attractive for new dApps in DeFi, LSTFi/LRTFi, AI agents verticals and so on.
Most importantly, the successful activation of such an ambitious upgrade would be a good trigger for general optimism of retail investors and institutions that are still pessimistic about Ethereum spot ETFs. Crypto researchers and investors will yet again see that Ethereum (ETH) is still flexible and capable of adjusting for industry trends.
Ether price: Bearish
There are only two possible bearish catalysts associated with the Ethereum Pectra upgrade: problems in the first days after activation or Pectra’s failure to scale Ethereum’s L1.
The first scenario is rooted in pre-upgrade concerns. Pectra was the most difficult upgrade to activate so far. Both its general testnets activations failed to accomplish synchronization in the first attempt. Ethereum (ETH) developers were even forced to roll out a special purpose-made testnet to experiment with the upgrade properly.
The last scenario will amplify the fears regarding users leaving Ethereum’s L1 in favor of many L2s, and, therefore, interested in working with associated tokens like ARB, OP and so on.
Bonus: What is Ethereum Fusaka, next upgrade post-Pectra
The Fusaka (Fulu-Osaka) upgrade is Ethereum’s (ETH) forthcoming hard fork, anticipated for mainnet activation in late Q4, 2025. Expanding the developments of Pectra, it aims to further enhance Ethereum’s scalability and developer experience.
As of printing time, Fusaka is set to implement several Ethereum Improvement Proposals (EIPs), including EIP-7594 (PeerDAS), which focuses on improving data availability for rollups, and EIP-7825, proposing a transaction gas limit cap to enhance network stability.
Also, previously, Ethereum (ETH) developers discussed the introduction of EVM Object Format (EOF) into Fusaka to radically rewrite smart contract bytecode, enhancing security and efficiency. However, due to community concerns caused by its complexity and potential to delay the upgrade, EOF has been dropped from Fusaka’s most recent tentative agenda.
Not unlike Pectra, Fusaka is set to enhance performance, security and developer experience for Ethereum (ETH) and EVM. With PeerDAS, post-Fusaka Ethereum will also have more accessible and cost-optimized data structures tailored for sophisticated dApps of various types.
Wrapping up
Activated May 7, 2025, Ethereum Pectra is the largest and most ambitious Ethereum (ETH) network upgrade since moving from proof of work to proof of stake in September 2022. It includes 11 Ethereum Improvement Proposals (EIPs) affecting various aspects of Ethereum (ETH) technology: transaction validation, consensus, on-chain accounts, staking and so on.
Most crucial updates — envisaged by EIP 7251, EIP 7691 and EIP 7702 — advance the performance of Ethereum (ETH) validators, increase blob space for dir=”ltr”>Successful Ethereum (ETH) Pectra activation is a huge catalyst for the entire ecosystem, and, potentially, the ETH price as a measure of its economic activity.
