Ethereum’s Pectra Upgrade Flops in User Engagement—Was It All Hype?
Ethereum’s much-touted Pectra upgrade landed with a whisper, not a bang. Despite flawless execution, network activity flatlined—no surge in transactions, no uptick in active addresses. So much for ’game-changing’ infrastructure.
Developers cheer the tech; traders shrug. Another case of crypto innovation outpacing actual demand? Maybe Wall Street was right to yawn—blockchain upgrades don’t print money (yet).
What Did the Pectra Upgrade Do?
Pectra introduced 11 Ethereum Improvement Proposals (EIPs) geared towards improving user experience and creating a future-proof network. The upgrade brought the execution and consensus layers together after incorporating a range of technical improvements.
Following the success of Petra, traditional crypto wallets, also known as externally owned accounts, now behave like smart contracts, enabling account abstraction. Validators can stake more than 32 ether (ETH) and up to 2,048 ETH, while there is enhanced compatibility between layer-1 and layer-2 chains.
In addition, there are reduced data verification costs for layer-2 rollups, and nodes can verify large data availability without a full download. Users can also sponsor transaction costs and pay gas fees in crypto assets other than ETH.
It is worth mentioning that Pectra was initially scheduled to go live on April 30. However, several technical and finality issues resulted in developers pushing the date forward to May 7.
Ethereum User Engagement is Down
Since Petra went live, the average number of new and resurrected addresses has fallen compared to their year-to-date (YTD) values. New Ethereum addresses have fallen 1.8%, while the resurrected ones have plummeted 8.4%.
However, churned addresses have also declined by 8.5%. Churned addresses refer to wallets that previously held ETH but have reduced their balance to zero. This often happens when more users embrace private crypto storage options. Although Pectra has not brought in new or returning users so far, the plunge in churned addresses raises the question of whether this is part of a broader cycle trend, which remains to be seen.
Meanwhile, Ethereum’s Realized Cap shows a reversal in a downward trend seen in the last three months. Glassnode noted that the metric, which tells the total capital stored in ETH, has risen from $240.8 billion to $244.6 billion since May 7, reflecting a $3.8 billion or 1.6% rise.
