Thread by @DefiIgnas

1/ Easy to be bearish on ETH:

It underperformed SOL and BTC, and bearish sentiment dominates the feed.

But there's a catalyst to get bullish about: Pectra upgrade: 🧵

2/ The Pectra Upgrade is Ethereum’s next major upgrade, expected to roll out in Q1 2025.

It merges the Prague (execution layer) and Electra (consensus layer) updates.

Unlike previous upgrades, Pectra seems to get no FOMO at all.

3/ I understand why:

Ethereum had three major upgrades in a few years:
• Transition to PoS
• Enabling ETH burn
• Reducing gas fees by introducing data blobs

But Pectra has a few cool upgrades under the sleeve.

4/ Account Abstraction is perhaps the most exiting.

Until now, AA usage was low because interacting with most DeFi dApps via smart contract accounts was cumbersome (ending in missed airdrops).

Ironically, Externally Owned Accounts (EOAs) still provide better overall experience.

5/ But EIP-7702 introduces a way to give EOAs super powers of smart contract wallets by allowing EOAs to have code attached to them.

EOAs *temporarily* act as smart contract wallets during transactions.

I repeat: EOA becomes a smart contract wallet only during a transaction!

6/ The benefits:

• Batching Transactions: Combine multiple actions into one transaction for efficiency
• Sponsorship: Another account can cover transaction fees if a user lacks ETH
• Privilege Management: Create sub-keys with limited permissions for specific tasks

7/ It reduces the gap between EOAs and Smart contract wallets, leading to more secure and user-friendly dApps.

E.g., it will make it easier to manage funds, automate processes, and interact with dApps EVEN without requiring users to directly hold ETH.

Approve+swap in one tx!

8/ Fun fact: Vitalik had reportedly wrote the EIP-7702 in 22 minutes, just before the Ethereum Foundation meeting.

Imagine how much more he could do if he didn't have a girlfriend!

https://twitter.com/711798630/status/1788188707595403554

9/ On staking front, EIP-7251 increases the maximum stake from 32 ETH to 2048 ETH.

Initially, the 32 ETH cap was designed for Ethereum's sharding plans, but now it’s outdated.

The result is over 1.5 million validators, driving up network complexity and costs.

10/ Key Benefits

• Large Validators: Reduce servers, maintenance, and costs by running fewer validators.
• Small Validators: Benefit from compounding rewards.

You will be able to stake 40 ETH at once instead of waiting for 64 ETH for two validators.

11/ Next: EIP-7594 introduces Peer Data Availability Sampling (PeerDAS) increasing data availability.

It lets nodes verify large DA without downloading it all further reducing costs for L2s, perhaps by 2x-3x.

Note: it's uncertain if PeerDAS launches with Pectra.

https://twitter.com/1453661470869360643/status/1823463041155129594

12/ A big upgrade brings changes to the EVM with eleven EIPs that will make it easier to write and deploy smart contracts, reducing costs and improving efficiency.

In other words, developing on Ethereum is about to get a lot smoother.

Learn more how here:

https://twitter.com/1792650324345323520/status/1813586073118818477

13/ There's more technical upgrades coming with BLS12-381 curve precompile, stateless clients, attestations and more.

@ethereumintern_ broken down these technical upgrades in the thread I shared above!

In short: Pectra will improve user experience for devs and users alike.

14/ Let me know if I missed something here!

Follow me @DefiIgnas for more.

Like/Repost the quote below if you can:

https://twitter.com/831767219071754240/status/1825891620149145806