Ethereum’s Pectra Upgrade on Sepolia Testnet, Candide Labs’ InstaGas, Echooo’s Abstracted Competition, and Etherspot’s X Space

#web3 #blockchain #news #ethereum

We are welcoming you to our weekly digest! Here, we discuss the latest trends and advancements in account abstraction, chain abstraction and everything related, as well as bring some insights from Etherspot’s kitchen.

The latest news we’ll cover:

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Ethereum Implements Pectra Upgrade on Sepolia Testnet

The Sepolia testnet has completed the Pectra upgrade, marking a significant development for Ethereum. This upgrade merges the Prague and Electra updates with the following key features:

Account Abstraction features with EIP-7702: Allows wallets to function more like smart contracts. Now supports transaction fee payments with assets other than ETH.
Staking Enhancements (EIP-7251): Increases the validator staking limit from 32 ETH to 2048 ETH, streamlining management for larger staking groups while raising concerns about potential impacts on decentralization.
Scalability and Layer-2 Improvements: Introduces enhancements via EIPs 7691 and 7623, aiming to boost overall network performance.
Smart Contract Deployment & Consensus Mechanisms: Simplifies deployment processes and implements new consensus protocols through EIP-7549.
Additional Features: Inclusion of PeerDAS and Verkle Trees to support long-term scalability, along with automated reinvestment of staking rewards for validators.

A custom deposit contract issue affecting transaction inclusion is currently under investigation.

The rollout of Pectra is executed in a phased manner — Phase 1 is live on Sepolia, with a second refined phase planned for 2026 — while mainnet implementation is scheduled for April 2025.

Candide Labs Announces InstaGas for Simplified Gas Sponsorship

Candide Labs has announced InstaGas, a no-code gas sponsorship paymaster designed to streamline gas fee management for decentralized applications on Ethereum, Layer 2s, and EVM-compatible chains.

The new platform is engineered to support smart wallet user operations by completely abstracting gas costs, allowing dApps to define customized gas policies without integrating complex code into their applications.

InstaGas works by receiving user operations from smart wallets and automatically checking for matching gas policies configured by dApp sponsors. The system returns a valid sponsorship signature if a suitable policy is available, thereby covering the transaction gas fee. The policies can range from simple, generic rules to more complex account, access, and transaction-specific criteria, ensuring that only pre-approved actions are sponsored.

Additionally, the platform utilizes a secure verification process that defends against potential draining attacks by enforcing strict policy parameters.

By eliminating the need for dApp users to hold ETH for gas fees, InstaGas addresses a significant friction point in the user onboarding process, fostering a more seamless and inclusive experience. This development has broader implications for industries such as DeFi, NFT marketplaces, and gaming, enabling cost-effective and secure transaction management.

Highlights from Etherspot’s X Space: Account Abstraction vs Chain Abstraction

Etherspot recently hosted an X Space focused on the future of Web3 user experiences, examining the roles of Account Abstraction and Chain Abstraction.

During the discussion, Alex, Social Media Manager at Etherspot, and Ani, Partnerships & Growth Lead, explored how each concept addresses distinct pain points while ultimately working in tandem.

Account Abstraction (AA) revolves around smart contract wallets, gasless transactions, and session keys, aiming to simplify onboarding by removing the need for seed phrases and streamlining transaction approvals.

Meanwhile, Chain Abstraction (ChA) focuses on seamless multi-chain interactions, handling liquidity, cross-chain messaging, and behind-the-scenes bridging so users no longer need to switch networks or hold native gas tokens on each chain.

Although some have suggested that AA and ChA might compete, the participants agreed they are complementary technologies. AA manages the wallet layer, enabling social recovery, Paymasters for gas fees, and batch transactions. ChA tackles interoperability challenges, allowing decentralized applications to function across multiple chains without imposing additional steps on end users. As a result, the combined effect removes core frictions that have hindered Web3’s mainstream appeal.

The conversation acknowledged that widespread adoption of AA has been slower than anticipated, partly due to existing wallets still relying on Externally Owned Accounts and the time required for developers to integrate new infrastructure. However, the emergence of chain abstraction may accelerate the transition, ensuring a more comprehensive user-focused framework.

Looking ahead, Etherspot intends to continue building solutions, such as Etherspot Pulse, that will simplify cross-chain transactions and encourage the seamless convergence of AA and ChA to create a unified, Web2-like Web3 experience.

Listen to the full recording on our YouTube.

Khalani Network Examines Liquidity Challenges Ahead of Potential 20x Intent Surge

Khalani Network has raised concerns about cross-chain liquidity as account abstraction gains momentum, potentially causing a 20-fold surge in intent transactions.

Speakers explored whether a 20-fold jump in user transactions is realistic as Account Abstraction usage nears 20% adoption. They believe solvers and aggregators will serve as crucial intermediaries in routing liquidity and automating atomic swaps. Still, they also questioned whether existing market makers and protocols can supply enough liquidity to meet exponentially growing demand.

Panelists noted the distinction between on-chain and off-chain liquidity, suggesting each will have unique roles as the industry scales. They highlighted the need for a shared settlement platform that solvers can rely on, allowing multiple liquidity sources to function without overextending themselves.

Settlement times remain a critical concern: if finalizing cross-chain or single-chain swaps can take 30 minutes or longer, large inflows and outflows might trigger bottlenecks. The conversation also touched on how fewer than 1% of Ethereum wallets currently use smart accounts, implying massive potential for future adoption.

Ultimately, the speakers emphasized that a robust liquidity framework must evolve alongside increased user activity. They questioned whether communities and market participants are fully prepared to handle a significant uptick in transaction volume.

Echooo Launches Abstracted Neo X Account Competition

Echooo has announced a new competition in collaboration with Neo, introducing abstracted Neo X accounts through the Echooo wallet. The initiative encourages users to download the Echooo wallet, which is an ERC-4337 account abstraction smart wallet that integrates multi-party computation, AI, and hardware-level security via trusted execution environments.

The announcement emphasizes that Neo is covering the account creation fee, removing any initial financial barrier for participants.

The competition offers a total prize pool of US $100,000 in Echooo Points, redeemable for future airdrops, along with $2,000 in GAS rewards. Participants are required to complete various social tasks and link their wallets to become eligible for these rewards.

The broader impact of this initiative is the promotion of secure digital asset management and the leveraging of account abstraction in blockchain technology, potentially setting a new standard for wallet security and user engagement.

Start exploring Account Abstraction with Etherspot!

Learn more about account abstraction here.
Head to our docs and read all about Etherspot Prime.
Skandha — developer-friendly Typescript ERC4337 Bundler.
Arka — an open-source Paymaster Service for gasless & sponsored transactions.
Explore our TransactionKit, a React library for fast & simple Web3 development.
Follow us on X (Twitter) and join our Discord.

❓Is your dApp ready for Account Abstraction? Check it out here: https://eip1271.io/

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