Coin Metrics: The Subsequent Impact of the Ethereum Pectra Upgrade

Written by: Tanay Ved, Coin Metrics

Compiled by: Shan Ouba, Golden Finance

Key points:

The Pectra upgrade for Ethereum officially launched on May 7, which includes increasing the maximum effective balance of validators from 32 ETH to 2048 ETH (EIP-7251) and doubling the blob space to support Layer-2 scaling (EIP-7691).

Currently, more than 11,000 validators have completed the merge, reducing the number of active validators by about 16,000, while keeping the total staked ETH amount unchanged, resulting in an average staking amount of approximately 32.4 ETH per validator.

The number of blobs published to Ethereum increased from about 21,000 to about 28,000, yet the demand for Rollup usage remains below the new target - 6 blobs per block.

As costs decrease, the number of transactions on Layer-2 continues to grow, with total blob transaction fees being almost zero. If fees rise, reliance must be placed on the increased demand for blobs from Rollup.

Introduction

The Pectra hard fork of Ethereum was successfully launched on May 7, bringing a series of improvements in validator operations and staking flexibility, an enhanced user experience (UX) through smart accounts, and capacity enhancements supporting Layer-2 scaling. This upgrade includes the implementation of 11 EIPs and marks another milestone since the launch of the Beacon Chain, continuing to advance Ethereum’s roadmap based on phases such as The Merge, Shapella, and Dencun.

This article analyzes the impact of Pectra’s initial launch, focusing on how the increase in Ethereum’s maximum effective balance and the doubling of blob space affect the staking mechanism and Layer-2 ecosystem. At the same time, we also tracked and analyzed key on-chain Ethereum metrics related to these changes.

Staking and Validators

One of the main goals of the Pectra upgrade is to optimize the validator operation process and enhance the flexibility of participation in the PoS system. One significant improvement is EIP-7251, which raises the maximum effective staking balance of validators from 32 ETH to 2048 ETH, which could have a profound impact on the economic structure of the network. This move means that stakers can now ‘top up’ existing validators or merge multiple validators into one to more efficiently earn compound rewards.

Maximum Effective Balance Adjustment (EIP-7251)

To understand the practical implications of this change, we can take a look at the specific process of validator merging:

Update the withdrawal certificate to type 0x02, indicating that the validator supports merge operations.

Select the source validator (the validator that will be merged) and the target validator (for receiving the staked balance);

Submit a merge request. Once submitted, the source validator will enter the exit queue (this queue is also used for voluntary exits and other merge operations), as the number of validators that can exit in each epoch is limited;

When the source validator reaches a withdrawable slot, it will exit the active validator set, and its effective balance will be transferred to the target validator, thereby completing the merge.

This mechanism enhances the capital efficiency of the PoS system, allowing large stakers to participate in network maintenance with fewer validating nodes, while also reducing hardware and operational costs.

The above image shows the number of validators that have successfully completed the merge (entered the active validator set) and the total amount of ETH merged. Since the Pectra hard fork went live on May 7, as of May 25, a total of 11,150 validators have completed the merge, merging a total of 359,146 ETH.

The impact on validators and staking economics

Due to the impact of mergers and exits, the total number of active validators has decreased by a net of 16,344 since the Pectra upgrade. This change may also have been driven by EIP-7002, which simplifies and accelerates the validator exit process. Since then, the number of active validators has started to decouple from the total staked ETH, as more and more stakes are concentrated among a few high-balance validators.

The benefits brought by this centralization are not only reflected in the improved capital efficiency of the stakers, but also help alleviate network load and peer-to-peer communication pressure—issues that can become bottlenecks in the system when the number of validators is large.

Currently, the average staking amount for each validator has slightly increased from about 32 ETH to approximately 32.4 ETH, but the effective staking balance for most validators remains below 128 ETH. As more node operators merge their stakes to improve returns, we can expect this average to continue rising, while the distribution structure of validator stakes will also change.

Blob Expansion and Layer-2 Development

Blob throughput doubled (EIP-7691)

Another core goal of the Pectra upgrade is to further support Layer-2 scalability, achieved by doubling the throughput of blobs. Blobs are a low-cost data availability solution introduced in the Dencun upgrade and are a key component of Ethereum’s scaling roadmap.

The EIP-7691 introduced in Pectra increases the target number of blobs per block from 3 to 6 (green line) and raises the upper limit from 6 to 9 (red line), thereby substantially increasing the supply of blob space. This means that Layer-2 will have greater transaction capacity and lower data availability costs.

After the upgrade, the number of blobs uploaded by the Rollup per day increased from about 21,300 to about 28,000 (an average of 4 blobs per block), and the blob space used increased from about 2.7 GB before the upgrade to about 3.4 GB. Looking at the hourly frequency data, the average number of blobs per block is gradually approaching the new target value of 6, indicating that the transaction demand for Layer-2 is growing.

However, blob fees are still extremely low at the moment as usage is still not up to target. Blob distribution data since Pectra’s launch shows that more than 40,000 blocks don’t contain any blobs, and there are already about 52,000 blocks that contain 6 or more blobs, which means there’s more room for growth.

When the number of blobs submitted per block exceeds the target value (which usually occurs during peak demand or network congestion), the blob fee market will be triggered, thereby increasing the fees for blobs (which also means Layer-2 costs will rise). In addition, EIP-7623 has also been launched in Pectra, which combats non-optimized data storage methods by increasing the cost of calldata, further encouraging Rollups to use blob space as a more economical data availability solution.

Impact on Layer-2

The increase in blob supply directly affects the cost of Rollups. The average blob fee has further decreased, making it more predictable and nearly free for Rollup projects like Base, Arbitrum, and Optimism. As a result, the total blob fee paid on Layer-2 has dropped to $0.00001 (approximately 4 gwei). Lower costs mean that Layer-2 has a higher profit margin while also being able to handle more transactions on its chain.

Layer-2 solutions like Base and Optimism have seen an increase in throughput, with the number of transactions surging from 8 million to 14 million after the Pectra upgrade. This trend is similar to the situation when the Dencun upgrade first introduced blobs in March 2024. If Ethereum hopes to derive more value from blob fees, Rollups need to gradually increase their use of blobs and push towards the new block limit (6 blobs per block).

Conclusion

Pectra is an important step for Ethereum towards the goal of a globally universal settlement layer, reflecting the ongoing evolution of the protocol. Although not as eye-catching as previous upgrades, this feature-rich hard fork introduces greater flexibility and efficiency to the staking ecosystem, making it more forward-looking and suitable for institutional participation, while laying a critical foundation for scalability and a better user experience (UX).

Although early data shows that the integration of validators is underway and the usage rate of Layer-2 blobs is also increasing, many anticipated economic changes and scalability effects still require time to gradually manifest. Pectra may not have attracted much attention, but it is quietly paving the way for the next phase of adoption and growth for Ethereum.