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Ethereum Foundation has officially announced that the highly anticipated Pectra upgrade, scheduled for May 7, will not include the debated EOF (EVM Object Format) changes. Instead, these updates will be introduced in the next upgrade, Fusaka, expected to roll out in Q3 or Q4 of this year.

What Is the Pectra Upgrade?

The Pectra upgrade focuses on enhancing Ethereum’s usability for validators and improving overall network functionality. Key features include:

  • Allowing users to pay transaction fees in USD Coin (USDC) instead of ETH.
  • Increasing the validator staking limit.
  • Improving the user experience for validators.

These updates aim to streamline operations and make Ethereum more accessible for new and intermediate-level users, especially those interested in staking and transaction management.

EOF Changes Delayed Until Fusaka Upgrade

EOF, or EVM Object Format, represents a significant overhaul of Ethereum’s execution engine. This change is designed to optimize and modularize the Ethereum Virtual Machine (EVM), making it more efficient. However, the proposal has sparked heated debates among Ethereum developers, with some arguing that its complexity may outweigh its benefits.

“The Pectra upgrade does not include EOF, nor [is it] intended to include EOF. Everything on Pectra is going as planned for the May 7th release,” said Tomasz K. StaΕ„czak, Ethereum Foundation Co-executive Director.

Tim Beiko, who leads Ethereum’s core protocol meetings, addressed concerns during a recent developer call, stating, β€œWe can’t choose not to do something just because it’s complex.” This underscores Ethereum leadership’s commitment to implementing Full EOF in the Fusaka upgrade, which is expected to bring broader structural changes to the network.

What to Expect from the Fusaka Upgrade

The Fusaka upgrade is set to be more ambitious than Pectra and will focus on improving scalability and efficiency. This includes restructuring the way smart contracts are written and executed. These changes aim to enhance Ethereum’s base layer, which has faced performance challenges in recent months.

As Ethereum’s base-layer performance has declined, some institutional investors have begun reducing their ETH holdings. For instance:

  • Galaxy Digital reportedly deposited 65,600 ETH (worth $105.5 million) to Binance and subsequently withdrew 752,240 Solana (SOL), suggesting a shift in portfolio allocation.
  • Paradigm recently sold 5,500 ETH (valued at $8.66 million) through institutional brokerage platform Anchorage.

Investor Sentiment and Market Impact

These moves reflect broader concerns about Ethereum’s tokenomics and protocol revenue. As Jayendra Jog, co-founder of Sei Labs, noted:

“While institutional investors initially bought into the β€˜ultra-sound money’ narrative, they’re now facing a reality where decreasing protocol revenue and weakening tokenomics create legitimate concerns.”

Although upcoming upgrades like Pectra and Fusaka aim to address these challenges from a technical perspective, it remains to be seen whether they will restore investor confidence in ETH as a long-term asset.

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