Ethereum sets new milestones: One-third of all Ether tokens have been staked following the platform's recent upgrade
The Pectra upgrade, a major hard fork activated on May 7, 2025, marked a significant milestone for Ethereum, bringing together 11 Ethereum Improvement Proposals (EIPs) to enhance scalability, staking efficiency, and network security.
The upgrade's impact on staking operations is noteworthy. Pectra refined staking procedures, optimising validator participation in consensus and managing stakes. This resulted in higher staking limits and more flexible staking functionalities, attracting more validators and increasing the total ETH staked on the network. By mid-2025, over 1.1 million validators were active, with more than 35 million ETH staked—around 29–30% of the circulating supply, a significant increase from the previous 25%.
This growth in staking not only improves staking efficiency but also bolsters the economic security of the consensus. The increased staking and validator participation significantly strengthen Ethereum's Proof-of-Stake consensus security model. Pectra introduced mechanisms such as a gas cap per transaction (16.77 million), enhancing resilience against denial-of-service (DoS) attacks, improving network stability, and making transaction processing costs more predictable.
Pectra also focused on improving scalability and user experience. It continued Ethereum’s progression from earlier upgrades by introducing smart accounts and account abstraction enhancements, such as EIP-7702. This allows externally owned accounts to temporarily execute smart contract code, making wallets more flexible and lowering transaction complexity for users, thereby smoothing everyday interaction with the network.
The upgrade also doubled Ethereum's fee burn rate, meaning a greater portion of transaction fees is removed from circulation. Combined with increased staking, this reduces the circulating supply, positioning ETH as a "scarcity asset with yield," which has contributed to positive investor sentiment and price growth post-upgrade.
In conclusion, the Pectra upgrade has boosted staking efficiency by increasing validator participation and improving staking protocols, while simultaneously enhancing network security via gas limits and other protective measures. These improvements advance Ethereum's ability to scale securely, support growing usage, and maintain a robust Proof-of-Stake consensus highly resilient to attacks.
However, the rapid growth in ETH staking brings new challenges, and the Ethereum community is actively developing incentives and mechanisms to ensure decentralization. The Pectra upgrade has made staking more profitable and simple for both large institutional players and small users, opening up new opportunities for greater decentralization and accessibility on Ethereum.
References:
- Ethereum Foundation Blog: Pectra Upgrade
- Consensys: Ethereum Pectra Upgrade
- CoinDesk: Ethereum's Pectra upgrade explained
- Cointelegraph: Ethereum's Pectra upgrade boosts staking, burn rate, and network security
The introduction of mechanisms such as the gas cap per transaction in Pectra enhances technology-based resilience against denial-of-service (DoS) attacks, contributing to more financial stability and secure investing in Ethereum.
The growth in staking, facilitated by the Pectra upgrade, has driven a shift in Ethereum's economy, positioning ETH as a scarce yet yield-generating asset that attracts both smaller users and large institutional investors, promoting greater decentralization.
