Ethereum Sees Steady Network Activity Following Successful Pectra Upgrade

Two weeks have passed since the Ethereum network executed its Pectra upgrade, yet there has been no noticeable increase in user engagement following the hard fork.

A recent evaluation by a crypto analytics provider revealed that Ethereum has not seen any influx of new or returning users. In fact, there has been a notable decline in user activity since the upgrade was implemented by developers.

Overview of the Pectra Upgrade

The Pectra upgrade introduced eleven Ethereum Improvement Proposals (EIPs) aimed at enhancing user experience and ensuring the network’s long-term viability. This update effectively integrated the execution and consensus layers after applying various technical enhancements.

With the successful rollout of Pectra, traditional crypto wallets, referred to as externally owned accounts, now function similarly to smart contracts, enabling account abstraction. Validators are now able to stake more than 32 ether (ETH) and up to a maximum of 2,048 ETH, along with improved interoperability between layer-1 and layer-2 blockchains.

Moreover, the costs associated with data verification for layer-2 rollups have been reduced, allowing nodes to verify extensive data availability without needing a full download. Users now have the option to sponsor transaction fees and pay gas expenses using cryptocurrencies other than ETH.

It is important to note that the Pectra upgrade was initially set to launch on April 30, but due to various technical and finalization challenges, the launch date was adjusted to May 7.

Decline in Ethereum User Engagement

Since the launch of Pectra, the average number of new and reactivated addresses has decreased compared to the year-to-date figures. New Ethereum addresses have dropped by 1.8%, while reactivated addresses have seen a significant decline of 8.4%.

Simultaneously, churned addresses, which are wallets that previously held ETH but have since reduced their balance to zero, have also fallen by 8.5%. This decline is frequently attributed to more users opting for private cryptocurrency storage solutions. While Pectra has not attracted new or returning users so far, the decrease in churned addresses raises the question of whether this reflects a broader trend, which remains uncertain.

At the same time, Ethereum’s Realized Capital has reversed the downward trajectory observed over the past three months. The latest data indicates that this metric, which measures the total capital retained in ETH, has increased from $240.8 billion to $244.6 billion since May 7, representing a rise of $3.8 billion or 1.6%.