- Pectra Update for Ethereum introduces EIP-3074 standard, allowing network fee sponsorship, enabling transactions without sufficient account funds.
- EIP-3074 resolves common blockchain challenges by permitting another account to cover gas costs, facilitating smoother transaction processes.
The upcoming Pectra update for Ethereum, scheduled for early 2025, aims to significantly improve the usability of cryptocurrency wallets. This update is planned in two separate phases to help avoid any potential programming errors.
A pivotal feature of this update is the introduction of the EIP-3074 standard, which will allow the sponsorship of network fees. This means users can complete transactions even if their accounts lack sufficient funds, as the gas costs can be covered by another account.
The innovation addresses a frequent challenge within Ethereum and other blockchain networks: wallets that hold valuable assets but do not have enough ether to execute transactions.
This problem often arises when assets are deposited into wallets without ether through airdrops, or when a novice cryptocurrency user receives funds from a friend. Previously, the only solution was to convert fiat currency into ether through an exchange, then transfer it to a private wallet to complete the transaction—a time-consuming and costly process.
With the introduction of sponsored transactions, Ethereum introduces a more straightforward and economical approach by allowing transaction fees to be paid by an external account. This adjustment simplifies the process by eliminating the need to possess ether to initiate transactions, thus removing a significant barrier to transactional efficiency.
Additionally, the update includes the EIP-7702 standard, also proposed by Ethereum co-founder Vitalik Buterin. This standard permits external ownership accounts (EOAs) to temporarily function as smart contracts to process transactions, and then revert to their standard state.
This functionality prevents smart contracts from having excessive control over user wallets, thereby reducing the risks associated with long-term custody of digital assets.
The Pectra update, following the Dencun update which was implemented in March 2024 and reduced gas fees through better data management, is set to further refine Ethereum’s framework. It will also enhance staking features by allowing a greater amount of ethers to be staked—from 32 up to 2048 ETH—which reduces operational costs by minimizing the need to interact frequently with staking contracts.
The current price of Ethereum (ETH) is $2,561.95, reflecting a 4.74% increase over the last 24 hours. The circulating supply is approximately 120.35 million ETH, with a 24-hour trading volume of about $19.42 billion.
