Ethereum experienced a significant surge, climbing 20% in just 24 hours, following the successful deployment of its highly anticipated Pectra upgrade on May 7, 2025, at 10:05 AM UTC. The “update,” called the Shanghai upgrade, represents the biggest hard fork in Ethereum’s history. It brings together 11 Ethereum Improvement Proposals (EIPs), merging the Prague execution layer upgrades with the Electra consensus layer upgrades. Pectra, with its unique architecture and blockchain technology, is focused on Ethereum improving its scalability, user experience, and efficiency of staking.
Pectra represents Ethereum’s 16th major network upgrade since the Ethereum blockchain launched in 2015. This upgrade has huge transformative potential. It’s a complete rethinking of staking economics and improving validator performance across the whole ecosystem, the Merge being the only thing coming close.
The intuitive Pectra upgrade is meant to make staking operations faster and more efficient. Moreover, by improving operational complexity it helps both individual and institutional validators. This, in turn, is designed to foster more active staking in Ethereum’s proof-of-stake network.
After the mid-February 2025 upgrade announcement, the upgrade continued to drive massive staking momentum – 627k ETH was staked. This increase shows the high level of confidence in the future of the Pectra network and the advantages it brings to stakers.
The impact of the successful launch on trading volumes can be seen here as well. Growth in TVL During this time, trading volumes surged by almost 46%, fueled by increased activity on Ethereum Virtual Machine (EVM). Pectra makes the EVM faster, cheaper, and more scalable, making it more appealing to developers and users.
Pectra benefits from more than a decade of Ethereum upgrades. Each upgrade addresses key connectivity gaps and improves the network’s collective mobility, safety, and access. For instance, the 2024 Dencun upgrade was particularly important in lowering Layer 2 transaction costs. This reached a tipping point where rollups became overwhelmingly more feasible for decentralized applications (DApps) running on Ethereum.
Despite the encouraging trend indicators set by Pectra, Ethereum-based ETFs have run into several unfavorable winds. As of the end of January 2025, these ETFs experienced $16.11 million in net outflows.
More than inspiring upgrades though, looking ahead, Pectra lays the groundwork for future education improvements such as Fusaka. Fusaka will build on and improve Layer 2 and Layer 3 scalability solutions for Ethereum. These improvements in-development are a clear reflection of Ethereum’s dedication to ongoing improvements and its pursuit to stay ahead as one of the most utilized blockchain platforms.
The Ethereum community has largely embraced Pectra. Developers, validators, and users all have high hopes that it will bring new long-term benefits to the ecosystem. The upgrade aimed primarily at increasing scalability and efficiency. It really addresses some of the major issues that Ethereum has dealt with in the past, unlocking greater adoption and more creative use-cases.
The surge in staking activity and trading volumes clearly signal the market’s positive reception to Pectra. As the upgrade’s ambitious features are fully implemented and harnessed, Ethereum is set to blossom into an even more vibrant ecosystem of innovation and activity.
