This FAQ is based on publicly available information regarding the Pectra fork as of March 2025. How it will actually turn out will become clear after the successful upgrade (expected in April 2025). The answers to the questions reflect the opinions of P2P.org experts and should not be considered as the final word.
All information presented in this article is a paraphrased interpretation of statements made by the official source Ethereum.org. Nothing in this article should be construed as legal, financial, or any other form of professional advice. Readers are encouraged to consult qualified professionals for specific guidance.
General
What are the main EIPs and functionalities of Pectra worth noting?
Max Effective Balance Increase
Allows validators to have a max balance of 2048 ETH instead of current 32 ETH limit
Enables Auto compounding for validators where CL rewards (~70%) go back into the validator to be liable to larger network rewards.
Consolidation (merge) of validators with different withdrawal addresses which can enable shifting between staking options or stake from SSP’s with minimal loss of rewards from unstaking/restaking
More details by the external link https://eips.ethereum.org/EIPS/eip-7251
Execution Layer Triggerable withdrawals
Now the validator withdrawal address can trigger withdrawals without needing a VEM or for the operator/custody to trigger, providing stakers more ownership
Partial withdrawals from validators e.g withdrawing 2 ETH from a 60 ETH validator
Topping up validators to be liable for larger network rewards instead of waiting for 32 ETH batches
More details by the external link https://eips.ethereum.org/EIPS/eip-7002
Supply validator deposits on-chain
Shorter validator activation time by ~12 hours
More details by the external link https://eips.ethereum.org/EIPS/eip-6110
Account Abstraction
Smart contract functionality for EOAs
More details by the external link https://eips.ethereum.org/EIPS/eip-7702
How can Pectra functionality be accessed?
By converting current 0x01 validators to 0x02 validators which can be done by;
Consolidating (merging) 2 validators where the end validator will be 0x02
Turning on Auto compounding for an 0x01 validator
Staking a new validator with auto compounding enabled
Directly interacting with Pectra SC to sign an upgrade txn for an 0x02 validator
All relevant functionality will be available through P2P.org dApp and API
How does Pectra help the Ethereum network?
The upgrade introduces key changes that enhance validator operations, making staking more efficient. These improvements include changes to validator exit and entry mechanisms, aimed to increase efficiency, and optimizations in gas fees.
What is the impact of Pectra on slashing?
The slashing penalty will be significantly reduced after Pectra:
The Initial Penalty will be reduced from 1 ETH to 0.0078125 ETH per 32 ETH validator. For a validator with 2048 ETH (the new maximum), the initial penalty would be 0.5 ETH - still significant but still 128 times smaller than under the current system.
The Inactivity Penalty remains proportional to the validator's effective balance and continues through the 36-day withdrawal period.
The Correlation Penalty remains the same and applies in the same way to validators of any size.
There are additional slashing risk considerations related to the validators consolidation design. For more details, check out our research paper.
How will the activation and withdrawal wait times be impacted?
Withdrawal wait time: This will remain unchanged. Activation time: Before Pectra, the activation time included the activation queue plus an additional 12 hours. After Pectra, the activation time will be reduced to the activation queue plus just 13 minutes.
What will happen to the existing 0x01 validators?
Nothing will happen to the existing 0x01 validators. Auto-compounding, consolidation into larger validators, or other actions will not take place until the staker takes action by upgrading their validator to 0x02 credentials.
Max Effective Balance
What is Max Effective Balance?
Max Effective Balance is the amount of ETH that affects the number of rewards a validator receives from the network. Before Pectra, this was capped at 32 ETH, meaning any additional ETH beyond this did not accrue staking rewards. The upgrade is expected to increase this limit, allowing validators to be liable for rewards on higher balances.
What are the differences between a 32 ETH validator and 2048 ETH validator?
A 32 ETH validator is the minimum staking requirement and operates independently. A 2048 ETH validator is essentially a consolidated validator, pooling multiple 32 ETH validators together to optimize operations and reduce overhead. The larger validator benefits from efficiency gains but follows the same underlying staking rules.
How does MEB change impact the Ethereum network?
By allowing validators to stake more ETH per validator, the network can become more efficient, reducing the total number of active validators while maintaining decentralization. This can lead to lower hardware requirements, improved synchronization, and better staking rewards distribution.
What is the optimal balance for a validator to sustain delegation over the long term while maximizing rewards?
The optimal balance depends on your strategy. With the Pectra upgrade increasing the Max Effective Balance, running larger validators will provide operational efficiencies and higher rewards. Note that the network rewards is based on integer ETH values, therefore validator with 32.9 ETH locked will act as a validator with 32 ETH locked, and 33 is where it will start having better compounding effects.
To get the most out of Pectra, our recommendation is to consolidate to 1920 ETH validators since hitting max cap of 2048 will disable auto-compounding of CL rewards so 1920 will give 2-3 years of runway before that happens.
How can I adjust the balance of my existing P2P validators?
The balance of the hosted validator can be adjusted by means of P2P.org dApp and API. This can be done by topping up a validator, partially withdrawing or full exits.
Since the 2048 ETH validator will have more voting power (i.e., a better chance to propose a block), does this reduce the probability of a 32 ETH validator proposing a block?
It is not anticipated. The probability of proposing a block for a 32 ETH validator should remain unchanged.
Will a 2048 ETH validator accrue network rewards at a higher rate than a 32 ETH validator?
The reward rate itself will not increase, but after validators are consolidated, those with higher stakes may have better chances of producing blocks. The network rewards is based on integer ETH values, so a 2048 ETH validator will experience greater compounding effects, as it accrues integer values more quickly. In other words, validator with 32.9 ETH locked will act as a validator with 32 ETH locked, and 33 is where it will start having better compounding effects.
Why I cannot lock more than 1920 ETH? Pectra allows 2048!
Auto compounding turns off once 2048 ETH is reached, therefore the cap of 1920 is set to have 2-3 years of runway for autocompounding.
Once locked amount reached 2048, what would exactly happen?
Once the locked amount reaches 2048, autocompounding will automatically turn off, and the Consensus Layer rewards will be sent to the withdrawal address starting from that moment instead of autocompounding on the validator
Validator Consolidation
What is Validator Consolidation?
In simple words, validator consolidation introduced by Pectra is the process of combining smaller validators into larger ones. This means that instead of having many small validators, there will be fewer but larger validators, which helps increase rewards, improve efficiency and performance on the network and reduce overhead.
Today the Max effective balance of a validator is 32 ETH and after Pectra this will become 2048 ETH. In-theory a user can consolidate 64 x 32 ETH validators together into 1 2048 ETH validator.
How can validators be consolidated?
Validator consolidation can be done directly on the P2P.org dApp.
Can multiple validators be consolidated at once?
Pectra’s consolidation Smart Contract only allows 2 validators to be consolidated at once however, P2P.org has enabled a bulk consolidation feature through our dApp and API in which we will bulk transactions to allow multiple validators to be consolidated - improving your user experience with our products!
Can validators from different operators or withdrawal addresses be consolidated?
Yes, this option will become available on P2P.org dApp
If validators A (0x01, pre-Pectra) and B (0x02, post-Pectra) are merged into validator B, which withdrawal address will be inherited?
If Validator A (0x01) and Validator B (0x02) are consolidated into Validator B, the withdrawal address of the new validator will be inherited from Validator B. In this instance, validator A would be considered the SOURCE validator and Validator B would be the TARGET validator. Only the SOURCE validator’s withdrawal address is required to sign a transaction to consolidate.
It can be done. Note that at least one active SSV-enabled validator with P2P.org is required to merge another validator into it.
Can validators with different deposit addresses be consolidated?
Yes, validators with different deposit addresses can be consolidated. The transaction will need to be signed with the private keys of withdrawal addresses for the SOURCE validator (funds from this will go into the TARGET validator).
What are other benefits of consolidated validators
The primary benefits will be auto-compounding of rewards which is more rewarding the higher the validator balance AND the speed at which consolidation happens (1 day reward loss) vs unstaking and staking new validators (12+ day rewards loss). There is also reduced operational maintenance as tracking rewards and performance for a single higher ETH balance validator is far more manageable than multiple smaller validators.
If no validators are held with P2P, can consolidation to a P2P validator still be performed?
Yes, consolidation to a P2P validator is still possible.
How much time does it take to consolidate validators?
The SOURCE validator will go through 1 day reward loss after which it will be consolidated with the TARGET validator. During this time the target validator will still be earning rewards.
Can the consolidation of validators be reversed back to 0x01 validators?
No, the consolidation cannot be reversed. However, the delegation can be withdrawn, and staking can be done anew with the 0x01 validator.
Auto compounding
What is auto compounding?
Autocompounding is an automatic process of accumulating the CL rewards (~80% of total rewards) what a validator is liable for, which are then added to the validator’s stake. This increases the amount of staked tokens over time, but without the need to manually claim and restake the rewards.
Execution Layer rewards are still distributed to the fee-recipient address chosen.
How can auto-compounding be enabled for a validator?
Auto compounding can be enabled on the P2P.org dApp.
Can I turn off auto compounding?
Once a validator credentials have been upgraded from 0x01 → 0x02, it is not possible to turn off auto-compounding unless the validator balance reached the 2048 ETH cap.
How much of additional network reward can be earned with auto-compounding?
Auto-compounding helps increase CL network rewards over time, but it’s important to note that rewards are only calculated based on whole integer amounts. For example, deposits like 32 ETH, 32.5 ETH, or 32.9 ETH will earn the same rewards as a 32 ETH deposit. Reward rate will only increase once the locked amount reaches the next whole integer value.
Validator withdrawals and top-up
What are validator withdrawals?
For 0x01 validators there are 2 types of withdrawals:
Full exits - when the entire validator balance is withdrawn pertaining to the exit queue.
Partial withdrawals - where EL/CL rewards are automatically distributed on 7-14 day cycles to the relevant withdrawal address and fee-recipient address.
For 0x02 validators, there are still 2 types of withdrawals but with the following changes:
Full exits - now the validator withdrawal address will be able to initiate a full exit instead of requiring VEMs or the operator/custody doing it on the stakers behalf (this can still be initiated), giving more ownership to the staker.
Partial withdrawals - now since CL rewards auto-compound back in to the validator, the staker can withdraw any amount from the validator as long as the validator balance remains above 32 ETH. EL rewards will still be automatically distributed to the respective fee-recipient address on 7-14 day cycles.
What are validator top-ups?
With Pectra, now 0x02 validators can top up their validator balance with ETH instead of waiting till they have 32 ETH to spin up a new validator, e.g if the staker has a 50 ETH validator and then acquired 10 ETH more, the validator can be topped up to become a 60 ETH validator. Currently the user would have to wait till they have 32 ETH and then spin up a new validator so Pectra allows ETH to start validating earlier than before.
Validator exits
How will validators exit work after Pectra? Do I need a new VEM?
Pectra is not deprecating the old exit mechanisms (dApp and VEM); it introduces a new one. Post-Pectra, the exit “request” will be a simple transaction that needs to be signed by the private key of the withdrawal address. While this functionality is not yet available on the testnet, it is expected that explorers (like beaconcha.in) and possibly wallets will integrate this option. It should become clearer as we approach the Pectra release date.