The upcoming Pectra upgrade for Ethereum is set to transform institutional staking by introducing validator consolidation and auto-compounding features. According to Artemiy Parshakov, vice president of institutions at P2P.org, these changes could reduce infrastructure costs by up to 90%. The consolidation feature allows institutions to manage staking infrastructure more efficiently by reducing the number of validators required. Auto-compounding reinvests staking rewards to increase earnings over time without manual intervention. The upgrade also introduces EIP-7702, which allows third parties to sponsor transaction fees, enabling a "free-to-use" model for Web3 applications. The Pectra upgrade aims to enhance the overall usability and adoption of Ethereum in the institutional staking space.



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