What is Ethereum's Pectra upgrade? Bringing smart contract functionality to wallets

What if managing your Ethereum wallet could be as easy and secure as sending an email? The Ethereum network has introduced a big change that aims to deliver this kind of simplicity to users, called the Pectra hard fork. The update is expected to make transactions safer, bring added stability to the network, and introduce a host of new features.

EIP-3074 is a key part of the Pectra upgrade. It'll change how transactions are handled, making the network more accessible and bring smart contract functionality to wallets. How will these modifications affect the blockchain community? Read on as we explore the Pectra hard fork and what it means for users of the Ethereum network.


  • Pioneering change: The Ethereum Pectra hard fork aims to change how people use their wallets and make the network more efficient.

  • EIP-3074 introduction: The proposal allows regular digital wallets to use smart contracts, enabling you to make more complicated transactions that are also safer.

  • Streamlined transactions: Grouped transactions and paying fees to third parties aim to make usability easier.

  • Social recovery feature: The update introduces a new way to regain lost funds, using trusted contacts instead of traditional seed phrases.

  • Community impact: Greater simplicity and safety from Ethereum and its wallets can help increase people's trust in and use of decentralized applications.

What is the Ethereum Pectra hard fork?

The upcoming Ethereum Pectra hard fork is a major milestone in Ethereum's history. It aims to improve wallet capabilities and the overall efficiency of the network. The update, which introduces numerous Ethereum Improvement Proposals (EIPs) — and notably EIP-3074 — is scheduled for launch in late 2024 or early 2025.

This proposal is designed to change the way Ethereum handles transactions by allowing digital wallets to use smart contracts. EIP-3074 includes capabilities such as grouped transactions, which let users sign a transaction once regardless of how many tasks it contains. The proposal also allows for endorsed transactions, which enable someone other than the asset owner to pay for transaction fees.

These improvements are intended to simplify a user's interactions with the Ethereum network, greatly enhancing the overall experience by removing transaction complexities and expenses. Meanwhile, EIP-3074 comes with a new "social recovery" feature. The feature lets you regain access to your assets without needing the usual seed phrases.

Impressive, but it doesn't end there. These latest upgrades are part of a wider plan to future-proof the Ethereum network and strengthen its status as one of the leading platforms for decentralized applications (DApps) and smart contracts.

What are the security implications of EIP-3074?

While EIP-3074 helps to make Ethereum more secure and easier to use, it's important to be aware of some security implications brought by the proposal's introduction. For example, the AUTH and AUTHCALL opcodes allow for more flexible transaction management but do introduce potential new vulnerabilities.

Security benefits

  • Formal audits and verification: EIP-3074 went through security audits to ensure safety. Audits are essential for finding and fixing vulnerabilities before they're exploited.

  • Enhanced user control and recovery: With EIP-3074, you can use digital signatures to give control of your Ethereum accounts to a smart contract. This makes it easier to get your assets back or manage them without risking the safety of your private keys.

Security risks

  • Potential for misuse of invoker contracts: One of the main risks associated with EIP-3074 is the potential misuse of invoker contracts. If these contracts aren't implemented securely, they could be exploited to perform unauthorized transactions or access funds without the user's consent.

  • Need for trusted invokers: Building on the point above, transactions made with EIP-3074 need invoker contracts that can be trusted. Developers should use measures like whitelists to allow only confirmed safe entities to be involved in transactions.

  • Complexity in transaction authorization: Using more complex ways to approve transactions can make new and old contracts easy to attack. Greater complexity occurs because the AUTH opcode changes who's seen as the "sender" in transactions. Vulnerabilities can arise if this process isn't managed carefully, putting users at risk of attack.

Mitigation strategies

  • Comprehensive auditing: Regular checks of the EIP-3074 implementation and the invoker contracts are important to protect users. These checks can help identify and fix vulnerabilities before they're exploited.

  • Strict validation of commits: To avoid issues like unauthorized access or replay attacks, commits must include ways to make sure each transaction is authorized correctly and can't be misused. One way to do this is by using unique identifiers or nonces.

How does the social recovery feature work with EIP-3074?

The social recovery feature brought by EIP-3074 is one of the most noteworthy updates coming to the network. Let's explore how it works in more depth.

  • Digital signature for asset control: First, you give control of your assets to a special contract by using a secure digital signature. This step is important because it lets the contract manage the assets, but you can still get them back if needed.

  • Invoker contract: When the assets move to the new contract, that contract will handle all future actions for you. This setup lowers the chance of losing access to your assets if you forget your private keys.

  • Operational codes - AUTH and AUTHCALL:

  • AUTH: This code checks that your digital signature and transaction details match your original instructions.

  • AUTHCALL: After checking, this command lets the contract send crypto. It also allows others to know you've sent assets, so people can see the link between you and the contract's actions.

  • Security and asset recovery: The digital signature contains a unique code that guarantees you can retrieve your assets if you lose or forget your seed phrase, making it an invaluable feature.

  • Enhanced security measures: Despite the new features, there are risks of dangerous invoker contracts. To protect against losing assets without permission, the update includes ways to use invoker contracts that have been officially checked and reviewed.

How will EIP-3074 affect transaction processes on Ethereum?

EIP-3074 will alter the processes involved in Ethereum transactions by adding new features that bring welcome simplicity.

  • Batch transactions: EIP-3074 lets you combine multiple transactions into a single one. This should make transactions more efficient and may lower fees by distributing costs across multiple actions within the same transaction.

  • Sponsored transactions: Sponsored transactions are a new feature with EIP-3074. Here, a third party can pay the transaction fees instead of the asset holder. This could incentivize the use of DApps as asset holders no longer need to pay gas fees.

  • Smart contract-like capabilities in EOAs: Now, regular user accounts can do some of the same things as smart contracts. They can give permission to smart contracts to perform actions autonomously.

Alongside reducing the complexity of transactions made through the Ethereum network, the Pectra hard fork also introduces new ways for developers to make disruptive and easy-to-use apps.

What other EIPs are included in the Pectra upgrade?

Various other proposals are set to be introduced as part of the Pectra hard fork, each bringing additional functionality to the network.

  • EIP-7610: This proposal is designed to make the system more secure by only letting addresses with storage space create smart contracts. In theory, this change will make it easier to upgrade the system in the future, especially via Verkle trees.

  • EIP-7523: EIP-7523 focuses on making the Ethereum network more efficient. With the proposal, empty accounts will be removed from the Ethereum state. This helps reduce the state's size, making the network faster and easier to use.

  • EIP-7251 (Maxeb): This addition aims to make the network more scalable by simplifying the management of validators. This is achieved by increasing the maximum effective balance for validators from 32 ETH to 2,048 ETH. Doing so reduces the need to manage multiple validators, which reduces complexity.

  • EIP-2537: The EIP-2537 update brings new pre-built functions to the BLS12-381 curve. These functions help make cryptography processes more efficient. Better cryptography means better security and verification on the network.

  • EIP-3074, 5806, and 7377: Account abstraction EIPs make it easier to process transactions. EIP-3074 adds new commands (AUTH and AUTHCALL) that allow for transaction contracts to be verified and executed autonomously once certain permissions are set. This helps with complicated tasks like combining multiple transactions into one or having someone else pay for a transaction.

  • EIP-5920 (PAY opcode): EIP-5920 provides an easier way to share ETH by sending tokens directly without activating the receiver's contract code.

Each EIP contributes to the broader goal of making Ethereum more scalable, secure, and user-friendly, laying the groundwork for future advancements in the blockchain space.

What comes after the Pectra hard fork?

Further updates are planned following Pectra's release in late 2024 or early 2025, most notably the addition of Verkle trees.

After Pectra, Ethereum is planning more updates. One important step is adding Verkle trees, which upgrade Ethereum nodes to validate blocks without needing to store large amounts of state data. This upgrade is a significant step towards 'statelessness' for the network. A stateless client doesn't need to store a full state database to validate incoming blocks.

Verkle tress and progress towards statelessness complements Ethereum's wider ambitions to improve scalability through advanced technologies like sharding, which aims to increase the number of transactions the network can process at once. This scalability solution has been a major focus following the network's move to Proof of Stake with the 'Merge' event.

The final word

The upcoming Ethereum Pectra hard fork promises to permanently alter how users make transactions on the network and manage their wallets. Efficiency, safety, and uprated features are all key benefits set to be brought about by the development and the arrival of the EIP-3074 proposal.

Although this next phase of evolution for the network isn't without its challenges — notably, concerns over potential security vulnerabilities — it marks fresh change for Ethereum and added competitiveness for the network.

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