Pectra upgrade, foundation restructuring, can Ethereum break its years-long slump?

After the upgrade of Pectra last Wednesday, ETH recorded its strongest weekly performance since 2021.

Original Title: "Can Pectra, UX and Team Shuffle Revive ETH?"

Compiled & Edited by: Patti, ChainCatcher

"One of the best things about Bitcoin is how neatly designed the protocol is." Vitalik Buterin, founder of Ethereum, the second largest cryptocurrency, said this about the first cryptocurrency, Bitcoin.

The timing of this statement coincides perfectly with the identity crisis that Ethereum is currently facing.

A week ago, Vitalik wrote this in his blog post "Simplifying the L1." Three days later, Ethereum developers deployed the most complex upgrade of the network to date onto the blockchain.

On one hand, after the Pectra upgrade on Wednesday, ETH recorded its strongest weekly performance since 2021. On the other hand, its co-founder hopes to rebuild the network with a simpler architecture.

Is this the beginning of the revival of Ethereum, or is it just another false dawn for a network that has stagnated for years while its competitors continue to reach new highs?

In this article, we will explore what changes are happening with Ethereum, why these changes are important, and whether these rapid developments can help Ethereum break free from years of stagnation.

Pectra Upgrade: A Key Battle in the Revival Attempt of Ethereum

The success or failure of this revival attempt of Ethereum largely depends on its recent upgrade.

On May 7, 2024, the pectra upgrade officially launched, marking the largest code change since The Merge (September 2022). This upgrade makes wallets smarter, enhances validator efficiency, and lowers fees for Layer 2.

This upgrade ultimately took more than a month longer than originally planned, and it changed the way Ethereum operates. Among them, the core content Ethereum Improvement Proposal (EIP) - 7702 granted smart contract functionality to regular wallets.

This seemingly technical change has actually reshaped the fundamental experience for users.

Anonymous Optimism project contributor Binji wrote on platform X: "Ethereum has only just begun to feel like a modern network." He further added that the Pectra upgrade has reduced the number of clicks required for users to "get things done."

In simple terms, this upgrade brings the following conveniences to users:

• Users can now bundle multiple operations together and execute them without having to approve each step of the transaction one by one.
• Users can pay fees with stablecoins without having to use Ethereum (ETH) for each transaction.

Dapps can even pay gas fees for users, implementing a "freemium" model, allowing users to interact without holding any ETH.

For validators, EIP-7251 significantly increases the staking limit from 32 ETH to 2048 ETH. This means lower operating costs, which is particularly beneficial for institutional stakers.

Layer 2 also benefits from it.

EIP-7691 doubles the blob space of each block, which helps keep Layer 2 transaction fees low as demand increases. This upgrade comes at a crucial time—Jesse Pollak, a developer from Base Chain under Coinbase, previously warned that demand for Layer 2 could grow "10 to 20 times" by 2025.

So, can these technological improvements translate into a rebound in market confidence?

Historically, Ethereum upgrades have often been accompanied by the situation of "good news priced in is bad news." After the "Merge" upgrade was completed in 2022, the price of ETH dropped by more than 30%.

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However, this situation may be different this time, as the code changes are accompanied by a shift in narrative and leadership.

What was the result? Within 40 hours after the Pectra upgrade went live, the price of ETH surged by about 40%.

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V God calls for reshaping the Ethereum user experience

Three days before the official launch of the Pectra upgrade, Vitalik Buterin published perhaps the most important vision statement of his years - "Simplifying the L1."

The core message he conveys in the article is that Ethereum must become "as simple as Bitcoin" within five years.

For many years, Ethereum has been increasing its complexity to address various technical challenges, and now, this Ethereum co-founder hopes to remove that complexity to ensure the long-term viability and resilience of the network.

He pointed out in his vision statement that even high school students can understand the code of Bitcoin. In contrast, Ethereum has become increasingly complex, which limits the range of people who can effectively contribute to it.

V's plan includes three radical proposals:

• Replace Ethereum Virtual Machine (EVM) with RISC-V architecture. The RISC-V architecture is simpler and more efficient, expecting to bring a "hundredfold performance improvement."
• Simplifies Ethereum's consensus mechanism through '3-Slot-Finality', discarding complex systems such as epochs and validator shuffling.
• Standardize the protocols of the entire technology stack from data encoding to tree structure.

Ethereum Foundation leadership restructuring

In February of this year, Aya Miyaguchi, Executive Director of the Ethereum Foundation, announced her transition to the newly established position of "Chair", marking the end of months of dissatisfaction within the community regarding the foundation's leadership and direction.

Previously, critics increasingly questioned the foundation's approach — in an increasingly competitive market environment, whether the foundation's prioritization of ideological purity over competitive positioning can still meet the development needs of Ethereum.

The restructuring triggered by this was officially finalized at the end of April, marking a significant governance change in the history of the Ethereum Foundation.

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The newly appointed leadership of the foundation quickly clarified its work priorities: expanding the Ethereum mainnet capacity, improving Layer 2 rollups, and enhancing user experience.

The two co-directors wrote in a public statement: "We are well aware that there is a need to accelerate the journey for developers, founders, institutions, and others to develop on Ethereum and adopt Ethereum technology."

For many years, the foundation has maintained a "neutral" stance, as critics call it, towards the development of the ecosystem, avoiding participation in any activities that appear to be marketing or competitive positioning.

The newly appointed co-director Stańczak stated in an interview with Bankless that improving communication is now a priority for the foundation, and that "clearly conveying messages is also part of marketing."

This simple statement represents a groundbreaking shift compared to the foundation's previous reluctance to even acknowledge marketing as a legitimate function.

The challenges still exist.

Despite these promising developments in Ethereum, it still faces significant resistance.

Currently, the trading price of Ethereum ETH is around 2200 dollars, less than half of its historical high of 4878 dollars set in November 2021. In contrast, Bitcoin and Solana have both broken previous records in 2025, while Ethereum is still hovering at a low level.

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In March of this year, affected by the market fluctuations caused by Trump's tariff policy, the decline of ETH exceeded that of other mainstream cryptocurrencies, with the price briefly falling below $1600, marking the lowest level for this cryptocurrency in a year and a half.

Critics point out that there are fundamental issues with Ethereum's economic model.

The paradox of Layer 2: The success of Layer 2 scaling means that the transaction volume on the mainnet will decrease, leading to a reduction in ETH's fee income.

Low staking efficiency: Before the Pectra upgrade, institutional stakers were forced to operate multiple validation nodes due to staking rule restrictions, which increased costs and reduced returns.

Technical debt accumulation: The complexity of Ethereum has slowed down the pace of innovation and raised the threshold for participation and contribution.

In addition, competition has become increasingly fierce.

In February and April of this year, Solana's DEX trading volume surpassed that of ETH. Even in the institutional investment sector, Bitcoin ETFs accounted for a large share of the inflow of funds, whereas the market acceptance of ETH-related products has been relatively tepid.

The leadership crisis in March further exacerbated these issues.

In this context, it is not difficult to understand why the Ethereum Foundation, Vitalik Buterin, and the core developers are now actively taking action from multiple aspects. After all, maintaining the status quo has become unsustainable.

So, can these reforms reverse the challenges that Ethereum has accumulated over the years?

Ethereum Reform Calibration

The current transformation of Ethereum is not limited to individual upgrade initiatives, but rather a recalibration of its overall development path.

With the advancement of this series of reforms, Ethereum finally realized that outstanding technical capabilities alone are not enough to maintain a long-term presence in the cryptocurrency world.

The key lies in the timing of the transformation. These changes have come late after Ethereum has experienced years of market share loss and poor price performance. After the Pectra upgrade, the ETH price surged by 40%, indicating that investors still have a strong interest in Ethereum. However, Ethereum faces tough competition from projects that integrated simplicity into their designs from the beginning, rather than retrofitting it later.

The Ethereum Foundation has brought technical experts into management positions and acknowledged the importance of marketing work, indicating that it has begun to address the cultural inertia issues that hinder its competitiveness.

The improvements achieved by the Pectra upgrade in the validator economic model and L2 scaling will bring positive benefits in the short term. However, in the long term, whether the five-year RISC-V architecture vision proposed by Vitalik Buterin can maintain its focus will be a major challenge for Ethereum. After all, in its past development, Ethereum has often struggled to maintain focus due to conflicting priorities.

The upcoming next upgrade - Fusaka, will be a key indicator to test Ethereum's strategic transformation. If this upgrade places the mainnet improvements on top of the second-layer network infrastructure, then it will confirm that Ethereum's strategic shift is real and lasting, rather than a temporary measure.

The next 12 months will reveal whether these changes are a revival of Ethereum or merely a slow adaptation to market realities. For investors, whether the Ethereum network can steadfastly pursue a new direction can be glimpsed from the ongoing effectiveness of its leadership and the momentum of development progress, which is far more important than any single technical milestone.

If Ethereum can complete this transformation while maintaining its core values, then its vision of a "world ledger" may reposition ETH as the cornerstone asset of the next-generation global financial system, with a value far exceeding the current price level of $2200.