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Ethereum developers tested a new upgrade on the Hoodi testnet, an event widely watched because the other two tests, Holesky and Sepolia, failed to work correctly. Staking providers used the test to prepare for the Pectra upgrade of the Ethereum network.

The Hoodi testnet runs parallel to the Ethereum main-net, so the next Pectra upgrade can be tested before being implemented in a live market. Ethereum developers can find and remove bugs before the next upgrade. If things run smoothly with Hoodi, the Pectra upgrade may occur on April 25. Some features of the Pectra upgrade include running smart contracts on wallets and paying fees using other tokens. Using Ethereum for gas fees while using a different token has been very inconvenient.

Ethereum developers expect the Pectra upgrade to occur in late April, given that the Hoodi testnet works well. Whale traders have started to accumulate Ethereum in anticipation of the upgrade. However, core developers must agree on the changes before a major upgrade occurs. Many investors anticipate a positive shift in the market because an upgrade is desperately needed to make Ethereum more accessible to regular users. 

“Upgrades are always going to have their hiccups”, said Nick Johnson, founder of Ethereum name service. “If delaying the mainnet launch ensures Pectra’s success – it’s a worthwhile tradeoff. While some in the community may find Etheruem’s methodical approach frustrating, it’s a testament to the core developers’ commitment to quality over speed”.

After reviewing the upgrade information, Arthur Hayes, co-founder of Bitmex, priced Ethereum at $5k, predicting on March 25 that Ethereum will still outperform Solana. The Pectra upgrade allows wallets to act as smart contracts, allowing batch processing and passkey authentication from the wallet. Other features involve improving deposit staking and extended blockchain history for applications that require more data. The Hoodi testnet allows developers to test features that will make Ethereum more user-friendly for developers and regular users.

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On March 5, the Sepolia testnet was created. It faced multiple problems, such as an unidentified attack that mined empty blocks. Due to such failures, the Hoodi testnet was created to prepare for the final rollout on April 25.

Software developers may welcome the change because the new feature of allowing smart contracts to operate on wallet addresses will enable developers to create wallets with custom features. For example, the new feature allows one to pay gas fees with a crypto other than Ethereum.

The Pectra upgrade will expand the staking limit from 32 ETH to 2,048 ETH and double the available block size, lowering fees for users, such as with privacy-focused applications. The cost of call data will also increase, encouraging developers to use blobs instead, which is a more efficient way to store data.