# Ethereum’s Pectra Upgrade Raises Staking Cap, Targets Institutional Investors
Ethereum (ETH) is set to enhance its appeal to institutional investors with the upcoming Pectra upgrade, significantly increasing the staking limit from 32 ETH to 2,048 ETH.
According to Cointelegraph, Mallesh Pai, Research Director at blockchain software firm ConsenSys, maintained that the upgrade does not pose a threat to Ethereum’s decentralization. Pai described Pectra as a process that “cleans up the repetitive background work handled by validators.”
In a May 9 discussion with Cointelegraph X Space, Pai emphasized that the probabilities of proposing blocks or earning rewards are proportional to the amount of staked ETH. “Even after the upgrade, larger validators will not have a particular advantage,” he added.
# Pectra Upgrade: Setting New Standards for Efficiency and Institutional Participation
The Pectra upgrade is considered the most significant update for Ethereum since the Merge in September 2022. With the new limit, validators can now stake up to 2,048 ETH. However, concerns about potential centralization have been raised.
Pai noted, “While there are approximately one million technical validators on the Ethereum network, many operate multiple virtual keys from a single physical machine.” Post-upgrade, these virtual keys could be consolidated, potentially reducing the number of validators to around 30,000. This consolidation is expected to eliminate redundant auxiliary tasks, allowing stakeholders to focus on more critical issues, such as reducing gas limits.
“In an ideal scenario, we would streamline to about 30,000 validators, enhancing network operational efficiency,” Pai stated.
Artemiy Parshakov, Vice President responsible for institutional clients at Ethereum staking service P2P.org, commented that “EIP-7002 will make institutional staking safer and more seamless, thereby fostering greater institutional participation.”
Looking ahead to 2025, Ethereum staking via exchange-traded funds (ETFs) is gaining attention. BlackRock has asserted that a successful Ethereum ETF is incomplete without staking capabilities. Various financial institutions have filed amendments to their Ethereum ETF applications to enable staking.
If these modifications are approved, investors could earn interest income, making ETF purchases more attractive. However, the U.S. Securities and Exchange Commission (SEC) has yet to make a decision regarding these staking amendments.
Bloomberg ETF Analyst Eric Balchunas, in a recent podcast interview, commented that while the approval of staking in Ethereum ETFs may not substantially impact fund inflows, he acknowledged that “Ethereum’s major issue is its economic performance. It has yet to show a consistent, long-term rally.”
