Key Points
- The Ethereum Pectra upgrade experienced complications on the Holesky testnet.
- Investor behaviour shifts as Ethereum’s exchange supply hits record lows.
The Pectra upgrade, eagerly awaited by many, was launched on the Holesky testnet of Ethereum on February 25.
This upgrade was designed to enhance scalability, security, and usability by testing new features in real-world conditions before the mainnet deployment. Nevertheless, the launch was not without its problems.
Upgrade Complications
Following the activation, the network slots remained unfinalized, hindering the finalization of transactions.
Even though blockchain data confirmed the activation of Pectra, it also showed a failure in the finalization process. Developers were swift to investigate the cause of this disruption.
Security expert Raul Riesco detected a critical error. He stated that developers did not specify the correct smart contract address for Pectra Request Hash Calculations, resulting in post-launch disruption and finalization delays.
Next Steps and Past Challenges
The next step involves deploying Pectra on the Sepolia testnet, originally planned for March 5.
However, if the issues with the Holesky network persist, developers might need additional time for bug fixes and stability enhancements. Any ongoing problems on Holesky could lead to a change in Sepolia’s schedule.
If both testnets operate without issues, the mainnet activation could occur as early as April. Developers are monitoring the testnet performance closely to ensure a smooth transition when Pectra is finally implemented on the live blockchain.
This is not the first time an Ethereum test upgrade has faced difficulties. In January 2024, the Dencun upgrade encountered a similar issue when it failed to finalize on the Goerli testnet. The current situation with Pectra adds to the history of testnet challenges that Ethereum developers must navigate before full deployment.
Ethereum’s Exchange Supply Hits Record Lows
Aside from the upgrade, Ethereum’s exchange supply is reaching all-time lows, indicating a change in investor behaviour.
Currently, only 6.38% of Ethereum’s total supply is held on centralized exchanges—the lowest level since Ethereum’s inception, according to Santiment.
Despite some investors’ caution, Ethereum’s transaction fees have plummeted to levels unseen since late August. The average transfer fee is now just $0.41, a significant drop from the $15.21 high recorded in the past two years.
Lower transaction fees suggest less network congestion, implying that fewer users are competing for block space. Historically, such conditions have been associated with periods of network stability, often setting the stage for long-term growth.
