Ethereum sees smart wallet activity spike as Pectra impact is felt

• Ethereum’s Pectra upgrade, live since May 7, marks a major leap in staking, scalability, and smart wallet functionality.
• Pectra slashed blob fees and doubled blob capacity, significantly enhancing Ethereum’s scalability and rollup efficiency.
• ETH market cap soared 42% post-upgrade, fueled by investor confidence and rising futures market interest.

Ethereum’s long-awaited Pectra upgrade has already made its mark on the Proof-of-Stake network. 

Pectra – a portmanteau of Prague (execution layer) and Electra (consensus layer) upgrades intended to deliver a raft of significant improvements – has occupied an oversized presence in the Ethereum mindshare since going live on May 7.

And it’s little wonder given the way the upgrade’s been greeted by the wider community.

With TradFi institutions now better positioned to engage in native ETH staking, Pectra could be the greatest boon for the network since 2022’s The Merge.

Smart wallets take center stage  

One of the standout achievements of Pectra so far is the notable surge in smart wallet activity.

Driven by EIP-7702, which allows Externally Owned Accounts (EOAs) to temporarily delegate control to smart contracts, the rise has seen no fewer than 11,000 smart wallet authorizations recorded.

EIP-7702 has been wholeheartedly embraced by dApps and wallets, with benefits flowing to end users; post-Pectra, EOA wallets are able to authorize smart contracts to act in their stead, obviating the need to migrate to a new smart contract-based wallet and enabling features like transaction batching, gas sponsorship, and privilege de-escalation.

EOAs are just the tip of the iceberg. On the scalability front, blob fees have dropped to near-zero, slashing costs for rollup operations, while  EIP-7691 has seen blob capacity double – enhancing app scalability.

Pectra’s impact is being felt across the board.

Needless to say, market optimism has been fueled as a result, with ETH’s market cap soaring by 42% by May 12, reflecting renewed investor confidence.

The ETH futures market has seen a similar uptick, with open interest rising from $21.3 billion to $30.4 billion between May 8 and May 11, indicating heightened market activity and interest from traders. 

Staking infrastructure steps up  

Staking infrastructure provider P2P.org was among the first to fully support Pectra’s major features – including validator consolidation, auto-compounding, partial withdrawals, and operator switching – through a live, production-ready staking dApp and API.

Indeed, these key features were made operational within a week of the upgrade. 

In addition, the provider has launched a live calculator to help users compare their current staking setup with a consolidated one, empowering them to optimize their validator sets immediately and capitalize on Pectra’s many benefits.

Artemiy Parshakov, vice president of institutions at P2P.org, has called Pectra “a major unlock for institutional staking, especially with account abstraction paving the way for smarter, automated strategies.”

Notably, Pectra raises the staking limit from 32 ETH to 2,048 ETH, giving rise to the prospect of boosted rewards and streamlined validator management.

Ethereum’s steady evolution  

The tangible improvements bundled up in the Pectra upgrade have been welcomed by users, developers, and institutions alike, and the increased inflows into staking protocols tell only part of the story.

While these advancements have generated the lion’s share of coverage, the impact of Pectra is multifaceted, encompassing scalability, ease of use, and convenience. 

As Ethereum continues its methodical evolution, Pectra sets a strong foundation for future innovations, proving that slow and steady indeed wins the race in building lasting blockchain infrastructure.