Pectra, launched in May 2025, is Ethereum’s largest upgrade since going PoS back in 2022. It incorporates 11 improvement proposals aimed at boosting staking efficiency, wallet usability, and network performance. It will be followed by Fusaka later the same year, focusing on enhancing scalability and data handling for L2 apps.
This feature provides an insight into those upgrades and discusses the effects they will have for institutional stakers.
The Pectra Upgrade
The Pectra upgrade went live on May 7, 2025. It bundled two coordinated hard forks, Prague (the execution‐layer fork) and Electra (the consensus‐layer fork), into a single release (hence the name, which is a portmanteau of Prague+Electra).
Pectra implemented eleven Ethereum Improvement Proposals (EIPs), only three of which focused on staking.
EIP-7251: Increase the MAX_EFFECTIVE_BALANCE
- Key changes: Previously, rewards could only be accrued on a maximum of 32 ETH, which left all funds above this threshold exempt from reward calculations. With EIP-7251, the limit is raised to 2,048 ETH, while operators can consolidate several validators with 32 ETH each into one major validator.
- What this means for institutional stakers: Major stakers do not need to run several independent validators if their total stake exceeds 32 ETH. By merging those into one “super-validator,” they can dramatically decrease DevOps overhead since there will be fewer nodes to maintain and reduce network overhead. Such structuring would not require many BLS signatures to process on the consensus layer.
Everstake’s COO, Bohdan Opryshko, commented to Forbes that the Pectra upgrade will have a major impact on institutional players.
- Slashing changes: Our DevOps team calculated that, to offset the risk of a 2,048 ETH validator being slashed, Pectra reduces the initial slashing penalty by 128x, from 1/32 of effective balance to 1/4,096 of effective balance. In other words, a 32 ETH validator previously faced a 3.125 % penalty for a slashable offense. Now, a 2,048 ETH validator would incur only a 0.024 % slash on its entire stake.
EIP-6110: Move Deposits to the Execution Layer
- Key changes: Previously, it might have taken around 12 hours to pass between depositing and validator activation because when 32 ETH were sent to the Deposit Contract on Ethereum’s Execution Layer (EL), the Consensus Layer (CL) had to observe it via log scanning and process it. With EIP-6110, deposit handling is shifted to the Execution Layer block, and the Consensus Layer can see new validator requests via a message from the EL.
- What this means for institutional stakers: Deposit finalization now takes about 13 minutes rather than 12 hours. This would enable major stakers to spin up big batches of validators on demand to promptly react to possible changes in compliance requirements or portfolio changes.
EIP-7002: Support for Exits and Partial Withdrawals via the Execution Layer
This EIP introduces the option to initiate a validator exit or partial withdrawal via a standard transaction in the Execution Layer for greater self-custody and regulatory clarity. For institutional stakers, it means accelerated response times, which is important for volatile markets or upon receiving a compliance request from regulators.
The Fusaka Upgrade
The next major update, Fusaka, is expected to go live in late 2025. Originally, it had to include EVM Object Format (EOF) and Peer Data Availability Sampling (PeerDAS), but due to certain technical issues and the risk of delay, the EOF component was excluded from the upgrade. Thus, Fusaka will introduce two key updates: PeerDAS and the increase of gas limit.
PeerDAS
PeerDAS is a data availability scheme set to increase the blob target per blob from 6 (max 9) to 48 (max 72). Blobs are big transaction data pieces stored off-chain to reduce congestion on the mainnet and decrease gas fees. PeerDAS removes the need for validators to download and verify full blobs, instead enabling a rotating subset of validators to sample “cross-sections” of each blob to confirm the data’s existence. This would lower the requirements for bandwidth and storage per node, and thus enable operators running expansive sets of validators to maintain high blob throughput without continually upgrading their hardware.
Gas Limit Increase
As of May 2025, each block in Ethereum can carry up to 36 million gas, but Fusaka is set to increase that limit to 150 million. With that, a block can include more transactions or complex smart-contract logic. This will benefit apps relying on higher throughput and remove the need for a full hard fork during every demand spike.
Conclusion
Ethereum’s 2025 upgrades prioritize institutional needs, such as higher capital efficiency, operational simplicity, and better scalability. At the same time, they address the pre-existing concerns of complex app developers and node operators, making the ecosystem more friendly to all players.
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Everstake is a software platform that provides infrastructure tools and resources for users but does not offer investment advice or investment opportunities, manage funds, facilitate collective investment schemes, provide financial services, or take custody of, or otherwise hold or manage, customer assets. Everstake does not conduct any independent diligence on or substantive review of any blockchain asset, digital currency, cryptocurrency, or associated funds. Everstake’s provision of technology services allowing a user to stake digital assets is not an endorsement or a recommendation of any digital assets by it. Users are fully and solely responsible for evaluating whether to stake digital assets.
