Hotcoin Research | Is Ethereum's To da moon new engine a hype or reality? Analysis of the Spectra upgrade and its impact on the crypto market.

1. Introduction

Looking back at over a decade of technological evolution in blockchain, Ethereum has always played a dual role as both a leader and a pioneer. From the genesis block in 2015 to The Merge in 2022, which achieved a 99.95% reduction in energy consumption, and then to EIP-4844 in 2024, which significantly lowered Layer 2 fees, each upgrade has profoundly changed the possible boundaries of decentralized applications. Now, faced with the fierce impact of emerging high-performance public chains like Solana and Sui, as well as the market's demand for low fees, high speed, and ease of use, Ethereum stands at a new crossroads—the Spectra upgrade. Against the backdrop of a sluggish ETH price and capital accelerating towards high-speed Layer 1s, the success or failure of Spectra will not only affect Ethereum's performance and experience but will also reshape the flow logic of funds, developers, and users in the crypto market.

This article will systematically sort out the Ethereum upgrade roadmap in simple and easy-to-understand language, break down the content and significance of the Spectra upgrade, and analyze its potential impact on the cryptocurrency market. Through this article, I hope readers can understand why Spectra may be the next big thing for Ethereum, and why it still faces severe challenges.

2. Background and Content of the Spectra Upgrade

The development of Ethereum can be divided into several phases: initially, it operated on a Proof of Work (PoW) consensus, and then in 2022, it completed the transition to Proof of Stake (PoS) with the "Merge" upgrade, which drastically reduced the network's energy consumption by about 99.95%, laying the foundation for future scalability. After the Merge, Ethereum's official roadmap proposed "The Six Visions for Ethereum", which are: Merge, Surge, Scourge, Verge, Purge, and Splurge. Each phase corresponds to different objectives, with the common goal of enhancing scalability, reducing costs, while maintaining network security and decentralization.

The Merge: In 2022, the Ethereum mainnet merged with the Beacon Chain, completing the switch from PoW to PoS consensus mechanism, reducing network energy consumption by nearly 99.95%, and creating possibilities for future scalability technologies (such as proposal-block separation, etc.).

The Surge: Significantly improve network throughput through technologies such as Rollup and data availability sharding (like the Blob data introduced by EIP-4844), aiming for Ethereum to reach a total of 100,000+ TPS on L1+L2. This phase will also continue to advance the Data Availability Sampling (DAS) scheme, initiating data sampling verification capabilities.

The Scourge: Designed to enhance censorship resistance and decentralization, focusing on reducing risks from large validators and single points of control, such as neutralizing the MEV (Miner/Validator Extractable Value) issue through mechanisms like enforced proposal-block separation (ePBS).

The Verge: Originally planned to use Verkle trees to replace the state root Patricia tree, allowing validators to verify blocks with a minimal "witness" without the need for the full state, achieving stateless clients. In addition, the Verge phase also looks forward to efficiently verifying execution using zero-knowledge proofs (SNARK/STARK), which is expected to enable any device (even mobile phones) to fully validate the network.

The Purge: By means of expiring historical data, simplifying protocols (such as retaining execution data for a limited time), and eliminating outdated functions, significantly reduce the storage pressure on nodes for historical data. For example, EIP-4444 proposes to unify the retention period for historical blocks and transaction data to within one year. Combined with future distributed storage mechanisms, nodes will no longer need to permanently store all historical states.

The Splurge: Includes various miscellaneous and detail optimizations, such as bringing the EVM into a more efficient and stable state (e.g., adopting a new EVM object format EOF), deepening the native account abstraction (allowing all accounts to have smarter functionalities), optimizing the fee model, and introducing more advanced cryptography (verifiable delay functions, obfuscated signatures, etc.).

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The Spectra upgrade (also known as Pectra, derived from Prague + Electra) is officially set to launch on May 7, 2025, and is the most significant network upgrade since the merger. This upgrade focuses on enhancing scalability and user experience while optimizing validator operations. Core objectives include: smart account support, increased data throughput, and a smoother staking/unstaking process, among others. Spectra includes approximately 11 core EIPs, covering multiple changes in both the execution layer and the consensus layer. Key contents include:

Account abstraction: EIP-7702 allows ordinary external accounts (EOA) to "temporarily" behave like smart contracts, enabling wallets to bundle transactions, set operational conditions, and have third parties pay transaction fees, among other functions. This means that users will no longer need to hold ETH to pay for gas; they can use stablecoins such as USDC, DAI, etc., to make payments, greatly simplifying the entry barrier for newcomers.

Validator Flexibility: The introduction of EIP-7251 raises the maximum staking balance for validators from 32 ETH to 2048 ETH, allowing large stakers to consolidate multiple validators into a single node, thereby reducing the overhead of running multiple nodes. At the same time, EIP-7002 adds an execution layer-triggered exit mechanism, enabling validators to exit independently by calling a contract without needing to hold the original validator private key, which further simplifies the exit process for validators. These changes will reduce operational complexity and improve network availability.

Scalability and Data Availability: EIP-7691 doubles the amount of blob data that can be accommodated per block (the average increases from 3 to 6, and the peak from 6 to 9), effectively improving the throughput of Layer 2 (Rollup) and alleviating past congestion issues. At the same time, to avoid overly stringent hardware requirements for nodes, PeerDAS (EIP-7594) is introduced—a peer-to-peer data availability sampling protocol. PeerDAS allows the network to confirm the availability of L2 data through random sampling, without requiring each node to fully download all data, thereby maintaining decentralization of the nodes while improving throughput.

State Optimization: EIP-2935 introduces new system contracts at the execution layer, allowing queries for the most recent 8192 block hashes, preparing for future technologies such as Verkle trees. Specifically, this contract enables light nodes to obtain relatively long historical block hashes without storing the entire history, thereby providing convenient support for decentralized state verification. In addition, EIP-7549 moves the committee index in the attestation message out of the signature range to simplify the verification work of consensus nodes and improve the efficiency of zero-knowledge proof circuits.

Other improvements: Spectra also includes incorporating validator deposits into the execution layer (EIP-6110), allowing ETH deposits to be directly integrated into the beacon chain at block creation, simplifying the verification of historical deposit data; EIP-7840 fixes the Blob configuration parameters of the block in the client, unifying the parameters for execution consensus; EIP-7623 adjusts the fee pricing of traditional calldata, guiding developers to use more efficient Blob storage. In addition, features such as BLS12-381 curve precompiles (EIP-2537) have been introduced to support future zero-knowledge protocols and multi-signature applications.

In simple terms, the Spectra upgrade allows the Ethereum network to run faster and more steadily without sacrificing decentralization. Ethereum nodes will be able to support larger amounts of data in the future, while the required hardware threshold will not increase exponentially, as the newly introduced PeerDAS mechanism alleviates the burden on each node. Higher throughput and more flexible verification mechanisms will bring users lower transaction fees and faster confirmation times, while developers will be able to design more complex and interactive applications based on this.

3. Analysis of the Impact of Spectra Upgrade on the Cryptocurrency Market

4. Capital outflow and ETH remain sluggish

Since the beginning of this year, the cumulative net outflow of Ethereum spot ETFs has exceeded $110 million, facing selling pressure. Institutional position reduction has led to the ETH/BTC ratio falling to a five-year low of 0.019, while the SOLETH ratio has increased by 24%. Since Q1, the average L1 Gas fee on the ETH network has been 20-30 times higher than that of Solana, with ETH processing around 1.5 TPS during the same period, while Solana peaked over 2,000 TPS. Due to the high staking threshold of 32 ETH, the ETH staking rate is only 28%, while Solana's staking rate reaches 65%.

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2. Spectra upgrades the supply and demand structure of ETH

Smart Account (EIP-7702) allows direct payment of Gas with USDC/DAI, removing the "buy ETH first" barrier, and is widely expected to increase daily active users by 15-25%.

Blob capacity doubles + PeerDAS allows L2 average fees to potentially drop by another 40%, Rollup transaction volume is expected to increase 2–3 times within 6 months.

EIP-7251 raises the single validator cap to 2,048 ETH, allowing for the merging of large nodes and reducing the loss of "re-staking" rewards; if 20% of stakers consolidate, the annual new selling pressure could theoretically decrease by 3-4%.

EIP-7002 allows the execution layer to initiate proactive exits, enhancing liquidity; combined with ETF rules prohibiting staking, Spectra after may encourage more long-term funds to stake directly on-chain for earnings, reducing circulating tokens in the secondary market.

3. The chain effect of L1 and L2

Solana occasionally experiences downtime even under high load, and lacks native abstraction at the smart account level; if Spectra significantly improves the ETH experience, it may divert some high-frequency trading and DeFi funds, suppressing expectations for SOL's "comeback".

Sui relies on the differentiation of gaming and social scenarios. After the fee reduction of Spectra, the cost advantages of L2 games (such as Immutable, Xai) will become prominent, potentially forming competition against Sui.

Layer 2 projects will directly benefit from the upgrade. The larger Blob capacity and improvements in data availability make transactions for projects like Arbitrum and Optimism more efficient and cheaper, thereby increasing the attractiveness of these scaling solutions. With the upgrade implemented, market participants expect the entire crypto ecosystem (especially Rollup tokens and DeFi platforms) to see more influx of funds and users.

4. Opportunities and Challenges Brought by Spectra Upgrade

Spectra upgrades bring numerous opportunities to Ethereum and the entire industry:

1. Expected to strengthen Ethereum's competitive advantage: By significantly enhancing scalability and user-friendliness, Spectra enables Ethereum to better respond to challenges posed by competitors such as Solana, Avalanche, and BNB Chain. For example, as Ethereum improves its processing capacity and reduces transaction fees, investors and developers will be more inclined to continue investing in the Ethereum ecosystem rather than shifting to other chains.

2. Enhance Ethereum's appeal to institutions: Higher scalability and stability, combined with the upcoming support for enterprise-level features (such as native privacy and contract accounts), are expected to attract further participation from fintech and traditional financial institutions in the Web3 space. This aligns with Ethereum's long-term vision of becoming a "truly global, secure infrastructure."

3. More user-friendly for ordinary users: Friendly payment methods and lower entry barriers may promote the popularization among the general public, contributing to the overall growth of the cryptocurrency market.

However, Spectra is also facing challenges:

1. Technical complexity and implementation risks: This upgrade integrates multiple cutting-edge technologies (PeerDAS, Verkle, etc.), and unexpected situations occurred during the testing phase: there were two instances of validator errors during the activation of the testnet, leading to network forks, forcing developers to conduct a third test to fix the issues. This highlights the complexity of large-scale protocol upgrades, and any similar changes in the future will need to be approached with extreme caution.

2. Fragmentation of Layer 2 Ecosystems: Currently, there are various L2 solutions on Ethereum. Achieving better cross-chain interoperability and liquidity sharing still requires more standards and infrastructure support.

3. Pressure from competitors: Other public chains are also stepping up their efforts to improve scalability and user experience. While Spectra has enhanced Ethereum's leading position, the technological iterations of other chains will continue to exist. Strategically, Ethereum needs to enhance performance while continuously strengthening its decentralization and security attributes to maintain its advantage.

V. Outlook and Summary of Future Ethereum Upgrades

Looking ahead, the Ethereum roadmap continues to evolve. After the completion of Spectra, the next focus will be on further refining the protocol and introducing next-generation technologies. The Ethereum Foundation has proposed to incorporate two major upgrade goals, Fusaka and Glamsterdam, into the roadmap after 2025. Fusaka will introduce more complete data availability sampling schemes such as PeerDAS, allowing Ethereum to achieve extremely high throughput without "swallowing" the entire network's data volume; Glamsterdam will focus on gas cost optimization and protocol efficiency improvements, maintaining high performance under more complex loads, especially supporting deeply integrated Layer 2 Rollup and ZK technologies. These two upgrades will propel Ethereum towards a truly global high-throughput settlement layer.

In summary, the Spectra upgrade represents a significant step forward for Ethereum in terms of scalability and user experience, providing opportunities for DeFi/NFT, large applications, and institutional-level use cases. However, at the same time, the upgrade faces high technical difficulty, intensified external competition, an unclear regulatory environment, and challenges in multi-layered ecosystem interoperability, all of which place higher demands on Ethereum. In the future, whether the Ethereum ecosystem can fully leverage these opportunities and effectively respond to challenges will determine its position in the global cryptocurrency market.

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