Ethereum Developers Launch “Hoodi” Testnet for Pectra Upgrade

Background and Key Developments

The Ethereum Pectra upgrade, one of the most anticipated technical updates of 2025, was originally planned to integrate the Prague execution layer with the Electra consensus layer and included 11 core improvement proposals (EIPs), such as increasing the staking cap to 2,048 ETH, optimizing account abstraction, and Layer 2 scaling. However, vulnerabilities revealed during synchronization tests on the Holesky and Sepolia testnets—such as issues with empty block generation and validator exit mechanisms—led core developers to add a third testnet, Hoodi, thereby postponing the mainnet launch to April 25.

The Hoodi testnet was launched on March 17 with the primary goal of simulating the mainnet’s real-world operating environment. It has allocated 20 million test staking ETH and involves 11 client teams and 5 staking operators in its validation process. If Hoodi runs stably for 30 days, the Pectra mainnet upgrade could be activated as early as April 25; otherwise, it may be further delayed to address potential risks. This decision reflects the Ethereum development team’s careful balance between technical innovation and network stability.

Technical Architecture and Innovative Breakthroughs

The technical breakthroughs of the Pectra upgrade are concentrated in three major areas:

1. Staking Mechanism Optimization: EIP-7251 increases the staking cap per validator from 32 ETH to 2,048 ETH, reducing node maintenance costs for large institutions, while a dynamic staking rate model is introduced to enhance network capital efficiency.
2. Account Abstraction and Smart Contract Upgrades: EIP-7702 allows users to pay gas fees using stablecoins and supports automatic execution of complex transactions by wallets, such as cross-chain asset allocation and scheduled payment protocols, significantly lowering the operational barriers for DeFi users.
3. Layer 2 Scaling Solutions: By increasing the per-block Blob capacity from 3 to 6, Pectra enhances the data processing capability for Layer 2. Combined with PeerDAS (peer data availability sampling) technology, it is expected to reduce Layer 2 transaction costs by 50%.
   In addition, Pectra integrates a zero-knowledge proof (ZKP) verification module to optimize cross-chain bridge security and improves smart contract execution efficiency via EIP-7549, thereby reducing gas consumption.

Market Impact and Industry Effects

The Pectra upgrade has potential impacts on the Ethereum ecosystem in three key aspects:

1. Acceleration of Institutional Entry: The increased staking cap and the introduction of compliance tools (such as KYC modules) pave the way for institutions like BlackRock to launch Ethereum staking ETFs, potentially attracting over $5 billion in institutional funds.
2. Restructuring of DeFi and Layer 2 Ecosystems: The expanded Blob capacity has led to a 120% increase in transaction throughput on Layer 2 networks such as Arbitrum and Optimism, spurring a boom in derivative protocols and RWA (Real World Asset tokenization) applications.
3. Reshaping Competitive Landscape: The high TPS advantage of competitors like Solana forces Ethereum to accelerate its technological iterations. Pectra’s account abstraction and low gas fee design are expected to win back mid-to-small scale developers and users who had migrated away.
   Market data indicates that the progress on the Pectra testnet may drive increased ETH price volatility; however, the risk of mainnet delay remains, and the long–short dynamics in the derivatives market are intensifying.

Challenges and Future Outlook

Despite its promising technical prospects, Pectra faces several challenges. First, there is the issue of client compatibility: synchronization vulnerabilities across different clients (such as Geth and Nethermind) could lead to fork risks, and the Hoodi testnet must validate cross-client stability. Next, regulatory uncertainty persists as the U.S. SEC is increasingly scrutinizing staking services; if ETH is classified as a security, it could limit institutional participation in staking. Additionally, there is pressure from an ecological cold start: the modular upgrade requires developers to adapt to new protocols, which may temporarily slow down DApp iteration speed.

Looking ahead, Ethereum plans to initiate the Fusaka upgrade after Pectra, which will introduce PeerDAS and Verkle tree optimizations for data storage, as well as explore AI-driven on-chain monitoring tools to further reduce network complexity. The developer community is also calling for a more agile EIP proposal mechanism to keep pace with rapidly changing market demands.

Ethereum’s continuous evolution is not only about realizing its technical roadmap but also about defining the core value of blockchain infrastructure in the Web3 era. For investors, monitoring the validation progress of the Hoodi testnet and changes in staking rates will be key indicators for predicting the success of the mainnet upgrade.