Ethereum Shows No Spike in Network Engagement Despite Successful Pectra Upgrade

It’s been exactly two weeks since Ethereum successfully completed its Pectra upgrade, but the network has yet to feel the impact of the hard fork on user engagement.

According to an analysis by crypto data and insights platform Glassnode, Ethereum has not registered any new or returning users so far. In fact, user engagement has plunged since developers deployed the upgrade.

What Did the Pectra Upgrade Do?

Pectra introduced 11 Ethereum Improvement Proposals (EIPs) geared towards improving user experience and creating a future-proof network. The upgrade brought the execution and consensus layers together after incorporating a range of technical improvements.

Following the success of Petra, traditional crypto wallets, also known as externally owned accounts, now behave like smart contracts, enabling account abstraction. Validators can stake more than 32 ether (ETH) and up to 2,048 ETH, while there is enhanced compatibility between layer-1 and layer-2 chains.

In addition, there are reduced data verification costs for layer-2 rollups, and nodes can verify large data availability without a full download. Users can also sponsor transaction costs and pay gas fees in crypto assets other than ETH.

It is worth mentioning that Pectra was initially scheduled to go live on April 30. However, several technical and finality issues resulted in developers pushing the date forward to May 7.

Ethereum User Engagement is Down

Since Petra went live, the average number of new and resurrected addresses has fallen compared to their year-to-date (YTD) values. New Ethereum addresses have fallen 1.8%, while the resurrected ones have plummeted 8.4%.

However, churned addresses have also declined by 8.5%. Churned addresses refer to wallets that previously held ETH but have reduced their balance to zero. This often happens when more users embrace private crypto storage options. Although Pectra has not brought in new or returning users so far, the plunge in churned addresses raises the question of whether this is part of a broader cycle trend, which remains to be seen.

Meanwhile, Ethereum’s Realized Cap shows a reversal in a downward trend seen in the last three months. Glassnode noted that the metric, which tells the total capital stored in ETH, has risen from $240.8 billion to $244.6 billion since May 7, reflecting a $3.8 billion or 1.6% rise.