Ethereum’s major Pectra upgrade went live on the Holesky testnet on February 25 at 16:55 (ET). Activated at epoch 115,968, the upgrade aims to test the load-bearing capabilities of new features in a controlled test environment.
Holesky – A Critical Testbed
Holesky is one of Ethereum’s major testnets, designed to simulate real-world conditions and help developers identify and fix bugs before widespread deployment on the mainnet.
However, the Pectra rollout has been plagued with initial issues. Despite launching on schedule, block explorers show that the network slots after activation are still incomplete. According to security expert Raul Riesco, the issue stems from a simple error – the development team forgot to specify the appropriate smart contract address to calculate the hash for Pectra.
Next Phases
The next phase will be the deployment of Pectra on the Sepolia testnet, which is scheduled for March 5. However, if the completion issues on Holesky persist, the schedule may be pushed back to give the development team more time to test and fix the bug.
If testing on both Holesky and Sepolia is successful, the Pectra upgrade could be deployed on the mainnet as early as April.
Notable Improvements in Pectra
The Pectra upgrade brings a number of important improvements to improve scalability, security, and user experience on Ethereum. Some notable upgrades include:
EIP-7702: Improves the user experience when using cryptocurrency wallets.
EIP-7251: Increases the maximum amount of ETH that can be staked in a validator from 32 ETH to 2,048 ETH.
EIP-7691: Doubles the maximum blob size to improve network scalability.
Ethereum Market Trends
Alongside the rollout of the Pectra upgrade, a key on-chain metric is showing a long-term bullish trend for ETH. The supply of Ethereum on centralized exchanges has dropped to a record low of just 6.38% of the total supply. This suggests that investors are moving ETH into cold storage, a sign that they intend to hold for the long term rather than sell.
Despite this, the Ethereum market has recently experienced significant short selling pressure, with Chicago Mercantile Exchange (CME) futures hitting a record high of 11,341 contracts. The number of bearish bets has increased by more than 40% in a week and more than 500% since November last year, reflecting short-term bearish sentiment towards Ethereum.
Additionally, transaction fees on Ethereum have plummeted to an average of $0.41 per transaction, the lowest since late August. This is down significantly from the high of $15.21 over the past two years. Traditionally, low transaction fees have been associated with reduced network congestion, which has helped the Ethereum ecosystem operate more stably and facilitated long-term growth.
Conclusion
The Pectra upgrade marks a significant step forward for Ethereum in improving performance and user experience. Despite some initial issues on the Holesky Testnet, the Ethereum development team is actively working on fixing bugs and continuing to test on Sepolia before deploying to the mainnet. Meanwhile, the decline in ETH supply on exchanges and low transaction fees are positive signs for Ethereum's long-term prospects.
