Ethereum’s Pectra Upgrade Faces Security Challenges Amid EIP-7702 Exploits
The highly anticipated Pectra upgrade for Ethereum, aimed at enhancing account abstraction through EIP-7702, has encountered significant security hurdles. Malicious actors are exploiting the new feature, which allows temporary smart contract behavior in wallets, to automate fund theft. Despite these challenges, experts emphasize that compromised private keys remain a critical vulnerability. As of June 3, 2025, Ethereum’s price stands at 2545.32 USDT, reflecting ongoing market confidence amidst these developments.
Ethereum’s Pectra Update Faces Security Concerns as Hackers Exploit EIP-7702 Feature
Ethereum’s Pectra upgrade, designed to advance account abstraction through EIP-7702, has inadvertently opened new attack vectors. The standard—endorsed by Vitalik Buterin—enables temporary smart contract behavior in wallets, but hackers are already weaponizing it to automate fund theft. Wintermute reports malicious actors are exploiting the feature at scale, though experts argue compromised private keys remain the root issue.
Security firms like SlowMist urge wallet providers to tighten controls on delegation signatures and improve user education. Despite its technical significance, the market has largely ignored Pectra’s rollout. The incident underscores the persistent tension between innovation and security in blockchain evolution.
Yuga Labs Divests Moonbirds IP to Orange Cap Games Amid Strategic Refocus
Yuga Labs, the creator of Bored Ape Yacht Club NFTs, has sold the Moonbirds intellectual property to Orange Cap Games as part of its ongoing effort to streamline operations. The MOVE follows Yuga’s acquisition of Proof Labs in 2024, which initially brought Moonbirds under its umbrella. Orange Cap Games, known for its Pudgy Penguins-themed trading card game Vibes, is expected to develop new projects for the Moonbirds brand while maintaining its integration with Yuga’s Otherside metaverse.
Moonbirds NFTs, which originally minted for 2.5 ETH ($7,600) in 2022, currently trade at a floor price of 0.9 ETH ($2,290)—a 40% surge over the past four days. Yuga Labs co-founder Greg Solano emphasized the company’s renewed focus on core assets: "We’re laser-focused on Apes, Otherside, and something special we’ve been cooking up." The divestiture raises questions about whether Yuga will shed additional non-core holdings, including potential changes to its ApeCoin DAO structure.
Ethereum Whales Trigger Supply Shock as Institutional Demand Surges
Ethereum’s market dynamics are shifting dramatically as whale accumulation creates a textbook supply shock. Exchange reserves have plunged to seven-year lows, with Glassnode data showing a rapid depletion of available ETH. The trend coincides with institutional players like Grayscale, BlackRock, and Fidelity amassing over 3.3 million ETH combined.
Public companies are accelerating their ethereum strategies—BTCS increased its holdings by 50% since Q1 2025, acquiring 1,000 ETH through Crypto.com in a single transaction. Analysts point to the simultaneous drop in exchange liquidity and surge in institutional demand as precursors to significant price movement. "When you see supply evaporate while smart money builds positions, that’s when markets move," says veteran analyst Armando Pantoja.
Ethereum Foundation Restructures R&D Team Amid Strategic Shift
The Ethereum Foundation has initiated layoffs within its research and development division as part of a broader restructuring effort. The Switzerland-based nonprofit aims to refocus on critical protocol design challenges, including scaling Ethereum’s base layer, expanding blobspace for data availability, and improving user experience.
The reorganization follows sustained criticism of the foundation’s management and strategic direction. Community members have warned for over a year that unaddressed technical hurdles could jeopardize Ethereum’s market leadership. The Protocol Research and Development division will now operate under the simplified name ’Protocol.’
While the foundation didn’t disclose the number of affected employees, it encouraged other projects in the Ethereum ecosystem to consider hiring the departing talent. The move represents a significant operational shift for the organization backing the world’s second-largest cryptocurrency.
