Thomas Daniels
Ethereum’s native token, Ether (ETH), experienced a significant surge in market capitalization, overtaking global giants Coca-Cola and Alibaba. This ascent follows the successful deployment of Ethereum’s Pectra upgrade on May 7, 2025.
As of May 12, ETH was trading at approximately $2,550, marking a 42% increase from its pre-upgrade value of $1,786. This price movement lifted Ethereum’s market capitalization to over $308 billion, positioning it as the 39th-largest asset globally, ahead of Coca-Cola’s $303.5 billion and Alibaba’s $303.7 billion market capitalizations.
Pectra Upgrade: Enhancing Ethereum’s Infrastructure
The Pectra upgrade, Ethereum’s most significant since the 2022 Merge, integrates 11 Ethereum Improvement Proposals (EIPs), targeting scalability, user experience, and validator operations.
Key enhancements include:
- EIP-7702: Introduces smart account functionalities to Externally Owned Accounts (EOAs), enabling transaction batching, gas fee sponsorship, and alternative authentication methods.
- EIP-7251: Raises the validator staking cap from 32 ETH to 2,048 ETH, simplifying operations for large-scale stakers and improving network efficiency.
- EIP-7691: Doubles the number of data blobs per block, boosting Layer-2 scalability and reducing transaction costs.
These updates are designed to streamline Ethereum’s functionality and make the network more robust for users and developers alike.
Security Concerns Emerge Post-Upgrade
Despite the technological strides, Pectra also introduced new security concerns. EIP-7702’s transaction type allows EOAs to delegate control via off-chain signatures. Security professionals caution that this could enable attackers to gain unauthorized access to wallets without any on-chain activity.
Smart contract auditors have raised alarms about the possibility of funds being drained through off-chain signed messages, urging users to be vigilant about what they sign.
Market Implications and Future Outlook
While the Pectra upgrade has temporarily propelled Ethereum’s market status, analysts advise measured optimism. The improvements underscore Ethereum’s dedication to long-term infrastructure growth, though they may not guarantee sustained upward momentum in ETH’s price.
Ethereum remains the dominant platform for smart contract activity, with more than half of global smart contract operations and over $50 trillion in total value locked. However, rising competition from faster and more cost-efficient blockchains and unresolved security vulnerabilities present ongoing challenges.
