Ethereum Will Receive a New Update in 2025

Ethereum is on a roll and continues to improve by adding a new update to the portfolio. The Pectra upgrade is expected to be a major change to the network since the Merge.

Ethereum is set to receive a major update in 2025, dubbed "Pectra." The upgrade will include several Ethereum Improvement Proposals (EIPs) that will address topics such as wallet user experience, speed, and efficiency.

For instance, through EIP-7702, wallets will become programmable like smart contracts, simplifying the process of account abstraction on Ethereum. Pectra also includes EIP-7251, through which validators will be able to stake from 32 to 2,048 ETH. This will strengthen network security and streamline the process of setting up nodes.

Considering that developers decided to split the update into two main packages, the first will include eight EIPs and is supposed to be released in Q1 2025. The fork update split is established to reduce deployment risk since Pectra is a highly complex update. Therefore, the second part of the update is expected to settle in 2026, where technical improvements will be targeted. Smart contracts will become more efficient, the EVM Object Format (EOF) will be introduced, and Layer 2 scalability will receive a major boost in performance.

On Verkle trees and PeerDAS

Since the final update includes a vast array of improvements, more aspects of the network will be in development. For example, Verkle trees will help with Ethereum’s scalability, verification process and compact proofs.

Verkle trees require less blockchain data to be stored by nodes, pushing for fast network speeds. Therefore, data management will improve in consideration of its continuously growing volume and security needs.

The Pectra update will also work on the Layer 2 solutions, often triggering congestion and high gas fees through the PeerDAS (Peer Data Availability Sampling). This technology will help L2 technologies handle data for affordable and fast transactions.

What will be the benefits for users?

Besides superior network efficiency, all Ethereum users will take advantage of Pectra. For instance, regular users will be able to expand their token use for dApps and use their ETH for more than just gas fee payments.

On the other hand, validators and stakers will be more efficient in managing massive amounts of ETH since the limit for staking ETH has increased. Groups of validators will merge to decrease computational burdens and improve network efficiency.

Finally, developers will access a superior version of the Ethereum Virtual Machine (EVM), meaning smart contracts will improve. Therefore, it will be easier for developers to write and release contracts, possibly putting the base for a flow of dApps in the future.

What follows after Pectra?

While the end of the Pectra update has to wait, we’re wondering what follows next. Ethereum’s creator, Vitalik Buterin, envisioned the roadmap development to happen sometime between five and ten years, meaning we’re only at the start of things.

Every part of the roadmap has a main goal, such as:

Each category expands across multiple aspects, so developers must ensure all updates are deployed without exposing the network to security concerns. When the Merge was introduced, many doubted its security, believing that PoS mechanisms weren’t as secure as PoW. However, the update only strengthened the network’s trust.

How do Ethereum updates affect prices?

As the network develops and more technology is added to the blockchain, investors’ interest in Ethereum’s potential peaks. In comparison with Bitcoin, which is only a store of value assets, Ethereum focuses more on its technical contribution to the crypto ecosystem.

This continuous strive for improvement made Ethereum a trustable source even for centralized companies, such as Visa. The giant payment brand now allows banks to leverage the Ethereum network to issue fiat-backed tokens, with an upcoming project to be released in 2025 by the Spanish bank BBVA.

Ethereum is getting closer to adoption as a technology, meaning its value will benefit from the increasing usage. The blockchain could be an efficient tool for healthcare data management, education, and supply chains, and cryptocurrency could become an instrument that bridges the gaps between decentralization and traditional systems.

So, will the price of Ethereum surge in 2025?

While price predictions are made with thorough market analysis based on technical and sentiment aspects, experts believe 2025 will be a lucrative year for Ethereum. The supposition is made in consideration of the staking services offered by banks, so users will be able to stake ETH more easily.

Moreover, the new US administration is likely to offer improved regulation on cryptocurrencies, which means fewer limits for investors, developers and entrepreneurs. The Securities and Exchange Commission (SEC) might also see some replacements, which may bring new ideologies to the table, as opposed to Gary Gensler’s view on cryptocurrencies.