Ethereum's value surpasses $2,200 following Pectra event; questioning the future trajectory of ETH.
In May 2025, Ethereum underwent a significant update known as Pectra, which brought about numerous technical improvements that have made the platform more efficient, scalable, and secure.
The most notable changes include:
- Account Abstraction for Externally Owned Accounts (EOAs) via EIP-7702: This feature enables advanced functions such as fee sponsorship and transaction batching, reducing friction for users and developers and improving usability and network throughput.
- Increase of Maximum Validator Stake via EIP-7251: The validator stake limit was raised from 32 ETH to 2,048 ETH, streamlining validator operations, promoting institutional staking, and reducing network bloat, which enhances security and network efficiency.
- Blob Capacity Expansion: The number of blobs (data chunks used in rollups) per block was doubled to 12, directly increasing throughput and reducing congestion at the base layer, thereby boosting scalability especially for Layer 2 solutions.
These improvements have led to a 53% quarter-over-quarter reduction in gas fees, reaching multi-year lows and enabling more cost-effective transactions. Layer 2 platforms like Arbitrum have grown significantly, now securing 72% of the total value secured on Ethereum, illustrating greater scalability and user adoption helped by these upgrades[2][3][4].
Other notable features of the Pectra update include:
- Gas fees can now be paid using stablecoins.
- Activation of smart wallets, which allow traditional accounts to execute contractual functions.
- A record of 474,044 unique active addresses has been registered in a monthly period following the Pectra update.
The Pectra update also incorporates eleven Ethereum Improvement Proposals (EIPs).
In addition to these internal improvements, the current global macroeconomic environment, including reduced inflation and positive monetary policies, is driving Ethereum's price increase and confidence in digital assets.
Sei, a platform known for its strong presence in the crypto market, has proposed to migrate to the Ethereum Virtual Machine (EVM) as its sole compatibility. This migration aims to simplify development, unify tools, and reduce operational costs for users and developers.
These developments position Ethereum on the cusp of a new technological and financial revolution, underpinning its growing institutional use and broader adoption.
[References] [1] Ethereum Foundation. (2025). Pectra Update. [online] Available at: https://ethereum.org/en/pectra/ [2] Arbitrum. (2025). Arbitrum Network Statistics. [online] Available at: https://arbitrum.io/stats/ [3] CoinGecko. (2025). Ethereum (ETH) Market Data. [online] Available at: https://www.coingecko.com/en/coins/ethereum [4] Dune Analytics. (2025). Ethereum L2 TVL. [online] Available at: https://dune.xyz/ethereuml2tvl/dashboard
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