Why is the Pectra upgrade considered a turning point for the commercialization of Ethereum?

Source: Franklin Bi, Partner at Pantera Capital; Translated by AIMan@Jinse Finance

The recent Pectra upgrade of Ethereum has been launched on the mainnet.

If Ethereum were a city, then Pectra would be like upgrading the city's infrastructure.

• Resurface the roads (enhance user experience). Improving traffic flow (reducing DA costs). Modernized power grid (verification node operation).

This is not a new skyline or a dazzling skyscraper. This is a tedious yet vital job that makes the entire city faster and safer, and allows everyone living there to have a better life.

Pectra is not just about gradually improving developer efficiency or cutting some gwei. This upgrade actually fundamentally changes the economics and user experience of Ethereum-based applications, enough to unlock new product categories and business models (see the list at the end for details!).

Pectra is the cost-performance turning point of Ethereum

Pectra bundles 11 Ethereum Improvement Proposals (EIP) on the execution layer and consensus layer of Ethereum to address some of its most troubling pain points: awkward user experience, high data availability costs, and slow validator operations.

But why has Pectra become a "turning point"? Because it marks the inflection point for Ethereum's cost-effectiveness: a critical threshold where the cost structure of the product changes relative to performance/value, making the product more attractive.

The protocol improvements of Pectra can now drive the on-chain economy and user experience beyond the cost-performance threshold, thus giving rise to a new category of viable products and business models. When lower costs, better performance, and enhanced user experience perfectly merge, miracles will happen.

Lowering On-Chain Costs Below the Pain Threshold

Before Pectra, the gas pricing for many on-chain operations (micro perpetual trading, low-value NFT minting, bulk yield rebalancing) was too expensive or unpredictable to support sustainable projects.

Pectra offers approximately 30% to 50% gas reduction and blob throughput enhancement, compressing these costs to a level that is "not worth considering" (for example, minting fees below $0.05, micro perpetual trading below $0.10). This means that today's "nice-to-have" features will become core revenue drivers in the future.

Working Principle:

Proto-Danksharding with Blobs (EIP-4844 + EIP-7691): Pectra introduces the first layer of Danksharding, the so-called "proto-danksharding", via Blobs. Blobs are a new data availability primitive that decouples the rollup payload from Ethereum's execution state. You can think of blobs as extra cargo space on an airplane: instead of cramming all packages into the cabin, you unload cargo into the hold, freeing up space and reducing costs. Rollups like Optimism and Arbitrum can now increase the amount of data invoked per block by up to 50% at half the price. For end-users, this means a 30% to 50% reduction in transaction fees when swapping tokens, bridging assets, or interacting with DeFi protocols on L2.

Calldata Gas Repricing (EIP-7623): Calldata (the raw instructions users send to smart contracts) will significantly lower costs. Imagine postage stamps: if the price of each stamp is lower, you can send longer letters without spending too much. Pectra reduces the Gas cost per byte, lowering the cost of batch transactions (sending multiple airdrops, batch treasury rebalancing, minting multiple NFTs) by up to 40%. Builders can bundle multiple operations into a single transaction, avoiding unpredictable spikes in fees.

Fixing User Experience Through Major Improvements

Wallet approval fatigue. Gas pop-ups. Multi-step registration processes. These clunky experiences may be bearable for hardcore cryptocurrency fans, but they are completely foreign to a broader audience.

Pectra's Gas abstraction and smoother user experience make on-chain interactions as seamless as a one-click experience in Web2. When users no longer have to worry about MetaMask or Gas limits, the user base can ultimately expand from millions to hundreds of millions.

How it works:

swap

Smoother Staking Process (EIP-7251 + EIP-7002): Improvements in staking user experience often go unnoticed but are significant. Pectra raises the validator staking cap from 32 ETH to 2,048 ETH, allowing node operators to combine stakes, similar to merging small bank accounts into a high-yield fund, simplifying management and reducing costs. The triggered exit mechanism becomes instantly effective, streamlining the user experience of liquid staking platforms and making staking operations as intuitive as withdrawing cash from an ATM.

Small Engine Adjustments (EIP-7846, EIP-7617): Small gas refunds and opcode adjustments may sound trivial, but they accumulate across thousands of contracts, thereby reducing the microseconds and micro gwei of daily on-chain computations.

What Pectra Indicates for the Future of Ethereum

('s optimistic attitude towards Ethereum's "achieving goals"

Critics of Ethereum often point out its slow governance and fragmented client support. Pectra has alleviated these concerns: in less than 24 months, Ethereum has successively launched the Shanghai upgrade on April ), Dencun in March ###, and now the Pectra upgrade in May (. Eleven EIPs were coordinated without any regressions or turmoil. I expect the frequency of future upgrades to be higher than the current annual upgrade frequency. The biggest takeaway is that Ethereum's "upgrade flywheel" is now running at full speed, reducing protocol risks for developers and investors.

) Better governance = More convenient delivery

Pectra's "meta-EIP" umbrella ( EIP-7600 ) showcases the progress of Ethereum governance. Multiple working groups, off-chain forums, and on-chain signals converge into a unified whole. It's like multiple teams working together to launch a space mission at the best time—except this time it's once a year, rather than once every few decades. Now, builders can view the upgrade timeline as predictable milestones rather than moving targets.

( roadmap confidence = investor confidence

By launching proto-Danksharding today, Ethereum paves the way for the full realization of Danksharding in the near future. Following Pectra, builders and investors can reasonably construct a transparent roadmap to achieve a throughput of 1 million TPS on L2 networks. As the lower limit of Gas costs steadily declines, business models can predict transactions below $0.10, shifting long-term planning from guesswork to precise forecasting.

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New Opportunities for Builders and Founders

Pectra not only allows for the construction of existing DeFi or NFT applications at a lower cost but also changes the types of applications worth building. Micro perpetual markets. Continuous auctions. Gas-sponsored social dApps. Enterprise-grade staking as a service. These features and products become feasible and could yield substantial profits.

Pectra is not just another upgrade; it represents a turning point in the commercialization of enhanced functionalities at the Ethereum base layer, moving from incremental optimizations.

The following is a non-exhaustive list of products and use cases after Pectra:

( DeFi

• Micro Perpetual Contracts and Mini Auctions Calldata costs have been halved, which means you can start a perpetual contract market or a continuous auction for real-world assets with an entry fee of less than $0.05. Imagine running a mini stock exchange on every block.
• Composable Yield Vaults and Orchestration Blob throughput makes it as easy to connect 5-10 profit strategies in a single multi-call as it is to order multiple dishes with one delivery fee. Startups can charge performance fees on top of management fees, creating recurring income for decentralized portfolio managers.
• Flash‑Bundle SDK Package flash loans, MEV capture, and gas sponsorship into a single SDK. This is like bundling the internet, television, and phone into a single subscription, applicable only to high-frequency DeFi primitives.

) Consumer Social Application + NFT

• Massive Minting: Pectra's calldata repricing technology can reduce gas fees by approximately 30%, bringing the total cost for 10,000 mints to under $1,000—making the cost of generating art mints as affordable as viral social media campaigns. While still catching up to the compressed NFTs/cNFTs on Solana, which can achieve low-cost minting of 1 million, it has undoubtedly made significant progress.
• Sponsored by Gas social enter Smart contract wallets can subsidize users' first few transactions, for example, offering a free first cup of coffee or zero-fee transactions, turning cold wallets into active community members through frictionless token interactions.

Games and Mobile Applications

• Smooth in-game economic system The precharged Gas points can unlock dozens of microtransactions during each gaming session. Imagine batch processing operations like manufacturing, market bidding, and loot collection, all done seamlessly. This brings a AAA mobile gaming experience without pop-ups.
• Dynamic Session Compression The client records off-chain operations and submits a single compressed blob at the end of the session. This is like compressing a bunch of files before uploading them, keeping gas costs stable and predictable.

( Enterprise and Infrastructure

• Enterprise-level Staking + Custody Raising the validator cap to 2,048 ETH can reduce the number of nodes in large staking pools by 64 times. Imagine merging multiple offices into a single headquarters, greatly increasing efficiency and creating a more diverse "business district."
• Stateless + Light Client Service The state hash unification mechanism of EIP-7685 lays the foundation for Verkle trees in Ethereum, thereby supporting stateless clients. This transition is akin to streaming content on demand, rather than carrying around a library full of books or CDs.
• Data Availability Middleware Blob proof can support off-chain DA networks (also known as middleware), ensuring 99.99% availability, just like CDNs guarantee fast content delivery globally.

) SDK and Tools

• Gas Sponsorship and Relayer Library The new JS/TS SDK will integrate bundler selection, fee estimation, and gas sponsorship into a single simple function call - similar to a payment API that integrates credit card transactions.
• Calldata Compressor and Multi-call Optimizer The Hardhat/Foundry plugin can analyze contract flows, automatically converting calls into blobs in bulk, and displaying gas savings estimates during compilation. Just like a code checker, it can highlight inefficiencies. This greatly improves the quality of life for developers.
• Observability Dashboard A suite of metrics will emerge for blob utilization, sponsor ROI, and proto-dank load distribution, providing advanced analytics for builders who need granular visibility.

Post-Pectra Era: Timing for Building and Upgrading

Pectra will not steal the spotlight with flashy features. It will not completely transform Ethereum. Instead, it strengthens Ethereum by enhancing its core, while raising the limits of on-chain economy and experience.

Various products that were once on the brink of survival have not only become feasible but also possess financing and scalability. This marks a business turning point for Ethereum, as it removes significant barriers to mainstream user experience, consolidates the accelerating pace of Ethereum's upgrades, and unlocks a new category of products ranging from micro-applications to consumer applications.

Build the native functional prototype product of Pectra now and seize the new advantages brought by Pectra. The next generation Ethereum-driven products are coming soon.