An evolving project may have a lot to say and a lot to offer. That’s where its success lies. You might have noticed “system update available” or “restart to install update” notifications popping up from your daily apps and your mobile phone. Straight to the point, Ethereum (ETH), the second-largest cryptocurrency by market cap, has made significant upgrades since its launch in 2015. And now, its Pectra upgrade is a buzzworthy subject.
So, what is Ethereum’s Pectra upgrade?
Ethereum unveiled its 16th major Pectra upgrade on May 7, 2025. This breakthrough development is a combination of two previous upgrades — Prague and Electra, and surprisingly, the name Pectra comes from this combo!
Prague: This component applies to the execution layer of Ethereum, and is the engine for running smart contracts and blazing-fast transactions.
Electra: A part that works for Ethereum’s consensus layer, meaning it coordinates all the nodes and secures the network with a proof-of-stake (PoS) consensus mechanism.
From scalability to more… Key changes the Pectra upgrade brings to Ethereum
- Pectra provides Ethereum with improved speed, cost-efficiency, and enhanced usability.
- It allows smart contracts on the network to work more efficiently with less gas and more security.
- Increased scalability with this latest upgrade makes Ethereum handle more users, transactions, and more data without compromising speed.
- The revised validator stake limits are between 32 to 2048 ETH. Earlier, validators could stake only 32 ETH.
- Pectra blends the network’s Externally Owned Accounts (EOAs) and Contract Accounts, known as account abstraction.
- Account abstraction allows
- custom rules for wallets, such as two-factor authentication, spending limits, or delayed
transactions. - permits to pay gas fees in tokens besides ETH.
- custom rules for wallets, such as two-factor authentication, spending limits, or delayed
Why is the Pectra upgrade vulnerable to hacking?
A smart contract auditor has highlighted a vulnerability in the upgrade, according to a report by a crypto media outlet. Despite the latest upgrade strengthening scalability and smart contract operations, hackers could potentially exploit the network, stealing funds from users.
Typically, transactions occur on the network only when users sign an on-chain transaction. However, with Ethereum Improvement Proposal (EIP-7702), which introduces a new type of transaction, Externally Owned Accounts could potentially be more easily seized by hackers using an off-chain signed message.
In other words, the new type of transaction, called SetCode (type 0x04), enables users to temporarily change their regular wallet (EOA) into a smart contract without actually deploying a smart contract. They must sign an off-chain message for this shift. This is the moment hackers can obtain the signature through phishing sites and trick users into signing on a fake Ethereum app.
Vladimir S, a threat researcher and author, wrote on X, addressing the audience to be cautious with what users sign.
Over the past two years, Ethereum underwent three major transformations, thanks to three powerful upgrades: The Merge, Shanghai/Capella, and Dencun. Each of these hard forks has brought significant changes to the network: reduction in energy consumption, enabled validator withdrawals, and reduction in rollup costs using blob transactions, respectively.
Change is essential, particularly in blockchain and tech, and every platform prefers meaningful improvements. But, as innovations evolve, risk factors can possibly coexist. That’s exactly what Ethereum’s Pectra tells us. Be careful and critical while putting your efforts into relying on the promising sides of any blockchain platform.
