Key Points
The highly anticipated Pectra upgrade for Ethereum is set to launch on April 8. This was announced by Ethereum developers during the All Core Developers Execution (ACDE) Call #205.
Pectra Upgrade Details
Tim Beiko, Ethereum Foundation Protocol Support Lead, disclosed the launch date. Prior to the mainnet activation, the upgrade will go live on the Holesky testnet on February 24 and Sepolia on March 5.
One of the significant improvements in the Pectra upgrade is the increase of Ethereum’s blobspace from three to six blobs in each block. This move is expected to enhance Layer 2 data availability, thereby reducing costs and congestion. The upgrade also includes execution-layer enhancements to improve network performance.
The Pectra upgrade will also accelerate the rate at which Ethereum burns, reinforcing Ethereum’s deflationary model. The London hard fork was the first to implement Ethereum’s burn mechanism, which permanently removes a percentage of ETH transaction fees.
However, the Dencun upgrade slightly decreased ETH burning due to the addition of blobspace. The decision to double the blobspace limit in the Pectra upgrade is expected to increase the amount of burned Ethereum. According to Ethereum researcher Justin Drake, these burn mechanisms could help Ethereum regain its position as “ultra sound money.”
Despite the potential positive impact of the Pectra upgrade on ETH price, investors are advised to remain cautiously optimistic. The price of ETH has been fluctuating, particularly after falling below the psychological $3,000 mark.
On-chain metrics, however, suggest a different trend. Data from DefiLlama shows that Ethereum’s total value locked reached its highest level since 2022 in January, indicating that ETH could benefit from the rising on-chain activity.
Ethereum ETFs are also attracting a lot of investor interest. As of February 13, data from SoSoValue shows that net inflows into ETH ETFs have reached $3.14 billion. Furthermore, Ethereum may experience a rise in demand following the filing of a 19b-4 by Cboe BZX with the SEC to allow staking for the 21Shares Core Ethereum ETF.
