Ethereum’s Pectra upgrade, three weeks in

The recent Pectra upgrade seems to have given Ethereum, the second-largest blockchain network by market capitalization, a major boost. 

As Ethereum was the first chain supported by 1inch, we’re closely following the development of this network. In this post, we’re looking at the outcome of the Pectra upgrade, which went live on May 7, 2025.

The impact of tech improvements

The Pectra upgrade featured 11 Ethereum Improvement Proposals (EIPs), making it the most ambitious update since The Merge back in 2022. The key EIPs included:

• EIP-7702 (Account Abstraction): This EIP allows regular wallets (EOAs) to temporarily function as smart contracts, simplifying batch transactions, gas sponsorship and wallet recovery. Ivo Georgiev from Ambire called it “the most significant UX improvement in Ethereum to date”. As early as May 8, 2025, wallets like Ambire and Trust Wallet began integrating these features, enabling users to pay for gas with tokens like USDC and combine multiple actions into a single transaction.
• EIP-7691 (Increased Blob Throughput): This proposal doubled the number of blobs per block from 3 to 6, theoretically reducing fees on Layer-2 networks and supporting rollup ecosystem growth. 
• EIP-7251 (Increased Staking Limit): Under this EIP, the maximum validator balance was raised from 32 ETH to 2048 ETH, simplifying management for large stakers and reducing network load. This could also attract more institutional investors, positively impacting decentralization.

These improvements aim to enhance Ethereum’s scalability, security and user-friendliness, which analysts believe could drive Ethereum adoption in the long term.

Security and risks

Despite the technical advancements, there are significant concerns about security, particularly with EIP-7702. Experts from CertiK warned that the new signature mechanism (offchain delegation) could open new avenues for phishing attacks, allowing hackers to seize wallets through fake requests. This requires wallet developers to implement additional security measures, such as clear delegation request displays.

Additionally, Mikko Ohtamaa from Trading Protocol was quoted in a CryptoSlate article as saying that the lack of standardization in implementing EIP-7702 features could become “a potential nightmare for developers” since different wallets may implement these features inconsistently, leading to compatibility issues and confusion.

Price and market trends

In the weeks following the Pectra upgrade, the price of ETH has shown significant growth, shooting to over $2,600 as of May 23. Observers link the price upside to increased dApp activity and institutional investor interest, aside from external factors like recent trade deals

Competition and long-term prospects

Meanwhile, Ethereum continues to face strong competition from blockchains like Solana and BNB Chain, which are showing higher user activity. For instance, according to a Cointelegraph article, Solana has 82.2 mln active monthly addresses, compared to 10.3 mln on Base (Ethereum’s Layer-2). However, as Pectra is making strides toward improving scalability and UX, Ethereum could still maintain its leadership in the Web3 space.

Ethereum’s long-term prospects, as outlined in a Mitosis University article, include preparation for future upgrades like Fusaka (tentatively scheduled for late 2025), which will introduce Verkle trees for further optimization. These improvements aim to keep Ethereum competitive and evolving as a global financial settlement layer.

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