The latest updates to Ethereum have the Defi protocol feel like a regular app and could boost ETH in the long term, according to an executive at P2P.org.
Over the past year, Ethereum (ETH) has steadily lost control over other altcoins and Bitcoins. Layer 2 networks are digging into Ethereum’s revenue, with some traders questioning the evolving talknomics of the network.
Rather than succumbing to pressure, the Ethereum Foundation has doubled and launched a new update that focuses entirely on ease of use and scalability. Artemiya Parshakov is the vice president of agencies staking infrastructure provider P2P.org, and explained to crypto.news why this is the right approach.
Instead of prioritizing short-term revenue, future Pectra upgrades aim to make decentralized apps more user-friendly, introduce new features to your network, and help Ethereum strengthen its leadership in the Defi space.
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Crypto.News: What are the most consequential changes a Pectra upgrade brings to Ethereum?
Artemiya Parshakov: The Pectra upgrade is honestly a game changer for Ethereum staking. The most fundamental shift is moving from the limit of the stiffness 32 ETH validator to allow up to 2048 ETH per valter. This completely changes the economics of operators like us.
I’m also excited about the automatic compound. Instead of just a reward sitting there, they will automatically feed back to your validator and develop your interests over time. Our model shows that this could bump from 3.2% to about 3.4% to about 3.4% over five years.
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Another big win is the novel penalty reduction. The initial penalty is 128 times lower than 0.008 ETH per 1 ETH to 32 ETH. This dramatically secures staking without compromising network security. For more conservative clients who were hesitant about their interests, this removes a major barrier.
And finally, partial drawers mean you are not completely trapped. You can continue to run Balidator and then subtract ETH. It’s much more flexible than the usual approach.
CN: Pectra upgrades focus on account abstraction, with specific upgrades to transaction batches, gas sponsorships and authentication. What innovations in Dapp Front could this be effective?
AP: Account abstraction opens up possibilities that were previously impossible. The ability to delegate controls from standard accounts to smart contracts means that you can ultimately build defi and staking products that feel like regular apps.
The side of gas sponsorship is huge. Think about onboarding new users to staking. They always needed an ETH just to pay for the transaction. Currently, Validators sponsor these gas fees and can remove that initial friction completely. Users can essentially interact with Ethereum without directly retaining the ETH of the gas.
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I’m already working on real-world applications on P2P.org. One feature of the R&D pipeline automatically calculates the ideal timing of departure based on network conditions. Before Pectra, this requires manual intervention, but you can build a system that automatically executes these drawers when the timing is perfect.
We are also investigating cross-protocol interoperability. Imagine seamlessly moving assets betted between protocols such as SSV, Eigenlayer, SWELL and other to optimize returns. Account abstraction makes these complex interactions more streamlined.
CN: How does increasing the maximum validator balance from 32 ETH to 2048 ETH affect P2P.ORG operations related to the Validator?
AP: This change is transformative for the operational approach. A single 640 ETH validator generates the same reward as 20 independent 32 ETH validators.
We have been preparing this for months and extensively testing it to make sure it’s ready on the first day. Our approach is to strategically cap the validator balance at 1,920 ETH rather than the full 2,048 ETH. This gives you a two-year runway before the automatic compound reaches its limit to stop.
Operational savings are not only suitable for our revenue, but also allow us to provide better rates to our clients. We are already working on ways to increase these efficiency and return to our stakers through higher rewards.
CN: Do you predict the possibility that the potential for centralization risk is due to an increased balance of verification equipment?
AP: This is a question we have taken extensively. The design is actually very elegant – larger validators maintain standard proof frequency, but their votes have a proportionately greater weight. Therefore, the 2048 ETH validator has the same impact as 64 individual validation devices and stores the security model.
An interesting aspect is that Pectra may actually promote more decentralization. There is a major barrier to entry with the technical complexity of running many validators now. By allowing integration, small operators can compete more effectively in efficiency rather than scale.
CN: Ethereum is popular to make transactions cheaper, especially by leveraging L2. However, this appears to be damaging revenue in the short term. What is your perspective on the long-term impact of this trend, and should Ethereum focus more on generating revenue in the short term?
AP: Ethereum’s approach here shows a true strategic vision, rather than chasing quarterly results. Making transactions more affordable with L2 and improved efficiency is building a more sustainable ecosystem in the long run.
The history of technology shows that platforms that prioritize affordability and accessibility will ultimately beat the market. See how AWS democratized cloud computing and cheaper smartphones have adopted mobile adoption globally.
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Specifically, Pectra is the protocol that is becoming more efficient from a cost perspective, but is actually improving the economics of the showcar through features such as automatic compounds. This balances the needs of users and validators in a way that strengthens the entire ecosystem.
We consider these changes to be part of the natural evolution of Ethereum. Our focus at P2P.org is always on performance optimization. Currently ranked number one in the effectiveness of key operators. These improvements in protocols allow staking to be more accessible for everyone, while pushing its performance even further.
Flexible pricing structures and innovations in account abstraction drive more users to the network and create a big pie for everyone rather than optimizing short-term fees.
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