If Ethereum wants to scale to billions, its user experience needs to be smoother. But for years, Ethereum’s gas fee model has been a major friction source. Every action, from sending funds to joining a dApp, required ETH, even if you were only using stablecoins. That friction created a usability wall, especially in regions with limited ETH access.

Now, thanks to the Pectra upgrade and EIP-7702, that wall is coming down. Ethereum wallets can now behave like smart accounts (just for a single transaction), unlocking stablecoin-based gas payments, sponsored transactions, and smoother onboarding without deploying smart contract wallets.

This means for the first time, users can send USDC, interact with dApps, or join DeFi protocols without touching ETH, deploying smart wallets, or fumbling through token swaps.

Let’s take a look at the network upgrade (Pectra) and the specific EIP (EIP-7702) bringing these improvements to Ethereum and what they mean for builders and users.

Understanding Ethereum Upgrades: Why They Matter

Since its inception, Ethereum has aimed to become a global platform for decentralized applications, financial services, and more. To fulfill this ambitious vision, Ethereum is constantly evolving. These improvements are delivered through network upgrades, sometimes called hard forks.

A network upgrade is a coordinated update to the Ethereum protocol. It’s essentially the rules that all Ethereum nodes follow. These upgrades bring new features, improve performance, fix inefficiencies, and keep Ethereum secure and scalable. Because Ethereum is decentralized, upgrades go through a rigorous community-driven process, where developers propose changes through Ethereum Improvement Proposals (EIPs), and the community discusses, tests, and eventually approves them.

Major past upgrades include:

1. The Merge (2022): Shifted Ethereum from energy-intensive Proof of Work to eco-friendly Proof of Stake.

2. Shanghai/Capella (2023): Allowed stakers to withdraw their ETH, making Ethereum staking more accessible.

3. Dencun (2024): Introduced “blobs” (data packets) to reduce Layer 2 costs and improve scalability.

Each of these upgrades marked a milestone in Ethereum’s roadmap, which includes long-term goals like improving security, scalability, usability, and decentralization.

Introducing Pectra: Ethereum’s Most Feature-Packed Upgrade Yet

On May 7, 2025, Ethereum successfully activated its 16th major network upgrade: Pectra. This upgrade combines two previously planned updates—Prague (for the execution layer) and Electra (for the consensus layer)—into one comprehensive release. With 11 Ethereum Improvement Proposals (EIPs) included, Pectra is the most extensive upgrade in Ethereum’s history.

At its core, Pectra is about making Ethereum faster, more user-friendly, and better equipped for mass adoption. It introduces features like smart accounts, simplified staking, better wallet recovery options, and improved Layer 2 integration—all while enhancing Ethereum’s core infrastructure.

The 11 EIPs in the Pectra Upgrade

Here’s a simplified breakdown of the 11 EIPs included in the Pectra upgrade:

1. EIP-7702: Temporary Smart Accounts for EOAs

Lets regular wallets (Externally Owned Accounts) temporarily act like smart contracts during a transaction. This enables features like gas sponsorship and advanced validation without requiring users to migrate to a smart contract account.

2. EIP-7251: Increase Validator Staking Limit

Raises the maximum ETH that can be staked per validator from 32 ETH to 2048 ETH. This reduces the total number of validators, improving network efficiency and reducing overhead.

3. EIP-7002: Execution-Layer Validator Exits

Allows validators to exit the network via the execution layer, enabling more programmable and automated staking systems.

4. EIP-6110: On-Chain Validator Deposits

Moves validator deposits to the execution layer, making onboarding simpler and more transparent.

5. EIP-7691: More Blob Throughput

Increases the number of data blobs per block to improve data availability and reduce transaction fees on Layer 2s.

6. EIP-7840: Blob Scheduling Standards

Standardizes how blob capacity changes are handled, preparing Ethereum for future scaling upgrades.

7. EIP-7623: Higher Calldata Costs

Raises the cost of calldata to push Layer 2s toward using more efficient blob-based data storage.

8. EIP-7685: Execution–Consensus Communication Format

Creates a standard format for communication between Ethereum’s execution and consensus layers, improving upgrade compatibility.

9. EIP-7549: Leaner Consensus Messages

Optimizes the consensus layer by removing redundant data from attestations, saving bandwidth and improving performance.

10. EIP-2935: Access to Older Block Hashes

Lets smart contracts access historical block hashes beyond the current 256-block limit, opening up use cases like trustless randomness and better on-chain apps.

11. EIP-2537: Efficient BLS Signature Verification

Adds native support for verifying BLS cryptographic signatures, making staking and cross-chain applications more efficient.

Key Benefits of the Pectra Upgrade

Pectra brings a range of practical improvements for users, developers, and validators:

1. Better Wallet Experience: Smart account features (EIP-7702) make wallets more intuitive, customizable, and powerful.

2. Simplified Staking: Higher validator limits (EIP-7251) and on-chain deposits (EIP-6110) streamline staking for institutions and individuals.

3. Faster & Cheaper Transactions: More blob space (EIP-7691) and Layer 2 enhancements reduce fees and improve scalability.

4. Enhanced Security & Flexibility: Features like multi-signature support, sponsored transactions, and smart exits (EIP-7002) create more secure and programmable interactions.

5. Developer-Friendly Infrastructure: Standardized formats and access to deeper blockchain data unlock new possibilities for dApp developers.

What Is EIP-7702?

At its core, EIP-7702 allows EOAs to temporarily include contract-like logic in their transactions. This is done by letting users attach a small piece of smart contract code—via a contract_code field—to any transaction. Once the transaction is processed, the account reverts back to its regular EOA state.

This new transaction capability essentially unlocks smart account features without the need to deploy and maintain a separate smart contract wallet.

Key Highlights of EIP-7702:

1. Transaction Batching: Combine multiple actions (e.g., token approval and swap) into a single transaction to save time and gas.

2. Gas Sponsorship: dApps and services can cover gas fees for users, improving onboarding and reducing friction.

3. Biometric & Modern Authentication: Enables wallet features like fingerprint or face ID for secure transaction signing.

4. Spending Controls: Users can impose daily limits or rules, much like setting controls on a debit card.

5. Protocol-native Integration: Unlike EIP-4337, EIP-7702 is built directly into Ethereum’s core, removing reliance on external infrastructure like bundlers and paymasters.

These features represent a leap toward Web3 usability that mirrors the intuitiveness of Web2 apps—bringing Ethereum closer to mainstream adoption.

How EIP-7702 Introduces Stablecoin Gas Fee Payments on Ethereum

The Gas Fee Problem: A Barrier to Everyday Use

For years, one of Ethereum’s most persistent usability issues has been how gas fees are paid. On Ethereum, every transaction requires a fee to be paid in ETH, the network’s native currency. This includes everything—from sending tokens to interacting with decentralized applications (dApps).

This requirement introduces several layers of friction for users:

1. Multiple tokens needed: Users must hold both the token they want to use (e.g., USDC) and ETH to pay for gas.

2. First-time hurdles: New users must first buy ETH from an exchange before doing anything meaningful on Ethereum, even if they already received USDC or another token.

3. Poor onboarding experience: For dApps, onboarding users means walking them through acquiring ETH, adding it to their wallet, and funding their account—all before they can start using the actual product.

4. Limited accessibility: In regions where acquiring ETH is difficult, expensive, or legally restricted, Ethereum becomes effectively unusable.

These challenges create unnecessary friction, especially for people who are not crypto-native or are simply trying to complete straightforward transactions.

The EIP-7702 Fix: Enabling Stablecoin Gas Payments Without ETH

EIP-7702 allows EOAs to include logic in transactions that can delegate gas fee payment to a third party, such as a paymaster service. While Ethereum still requires ETH for gas fees at the protocol level, third-party services can handle ETH payments on the user’s behalf and accept stablecoins like USDC in return.

In practice, a user might:

• Use a wallet that supports EIP-7702.
• Submit a transaction with embedded logic delegating gas fee payment.
• Have a paymaster (e.g., Circle) check their USDC balance and sponsor the ETH gas fee.

This flow enables a gas-free user experience, even though ETH is still used under the hood.

At its core, EIP-7702 introduces a new, flexible transaction format that abstracts away the rigid “ETH-only” requirement for gas, transforming Ethereum into a more intuitive and user-friendly platform.

This shift has wide-reaching implications. For the first time, Ethereum accounts can:

• Operate with a single token. No more juggling ETH and ERC-20s.
• Support sponsored transactions or alternative gas tokens out-of-the-box.
• Onboard users seamlessly by skipping the confusing ETH acquisition step.

How Bitpowr is Leveraging EIP-7702 to Unlock Seamless Transactions

One of the biggest pain points in crypto payments has always been requiring ETH to use USDC. A user might receive $100 in USDC from a friend, but be unable to send it anywhere unless they first acquire some ETH to cover gas. It’s like receiving cash but needing a second currency just to spend it. This is a frustrating barrier, especially for newcomers.

Until now, the workaround has been to use smart contract wallets powered by account abstraction. These enable sponsored transactions and allow gas fees to be paid in tokens other than ETH. However, they come with a catch: users must deploy a smart wallet first. That deployment still costs gas in ETH, reintroducing the very problem these wallets aim to solve.

Bitpowr is leveraging EIP-7702 to change that. With EIP-7702 in place, Bitpowr’s Paymaster can step in to evaluate transactions submitted by EOAs and cover the gas fees using the native asset.

How It Works

When a user initiates a transaction with an EOA, they include a delegation signature pointing to a smart contract that handles execution logic—effectively turning the EOA into a smart account for that one transaction. Bitpowr’s Paymaster then evaluates this request, confirms the user has sufficient USDC or USDT, and pays the gas fee in ETH on their behalf while charging a specified amount for the conversion.

This behind-the-scenes coordination results in a user experience that feels intuitive and familiar—like using a mobile payment app, but powered by decentralized infrastructure.

Before EIP-7702: A User Experience Gap

Users receiving USDC had to:

• Get ETH to cover gas fees.
• Possibly deploy a smart contract wallet to enable gas sponsorship.
• Learn how to swap tokens and manage wallets.
• Even developers looking to abstract gas for users had to spin up smart wallets and integrate complex systems.

After EIP-7702: Seamless, Smart, Gas-Free UX

Now, with the Pectra Upgrade and Bitpowr’s Paymaster:

• A user receives USDC in a regular EOA.
• They want to send that USDC or interact with a dApp.
• Behind the scenes, their transaction includes smart logic enabled by EIP-7702.
• Bitpowr’s Paymaster checks the USDC balance and pays the gas in ETH for them.
• The transaction goes through—no ETH ever needed by the user.

What Frictionless Gas Payments Mean for Builders

With the Pectra Upgrade now live, builders are empowered to deliver smoother, more intuitive apps and services that no longer require users to grapple with the complexities of native gas tokens.

Here’s what this means in practice:

1. Lower Barrier to Entry for New Users

For most non-crypto-native users, the requirement to acquire ETH just to interact with an Ethereum application has long been one of the biggest roadblocks. With EIP-7702 enabling stablecoin gas payments through smart delegation mechanisms, builders can now offer gas-free onboarding flows.

• A new user can receive USDC in a fresh wallet and start using an app immediately.
• No need for exchanges, token swaps, or confusing tutorials on gas.

This makes onboarding feel familiar, like logging into a web app or funding a digital wallet, and removes a core source of drop-off.

2. Simplified Developer Integration

Traditionally, enabling sponsored gas flows or alternative token payments meant developers had to integrate complex smart contract wallets or rely on Layer 2-specific infrastructure. EIP-7702 eliminates much of that overhead.

• Builders can support programmable EOAs without deploying custom smart wallets.
• Standard EOAs gain smart contract-like features on a per-transaction basis.
• Existing tools (like Circle Paymaster) work out-of-the-box with minimal integration.

This lowers development costs and time-to-market while broadening compatibility across the Ethereum stack.

3. Enhanced dApp User Experience and Retention

Historically, interacting with Ethereum-based apps meant users had to deal with complex workflows such as managing gas fees, confirming multiple transactions, and sometimes even abandoning the process midway due to confusion or cost. These pain points directly hurt user engagement and retention.

With EIP-7702 abstracting gas payments and enabling smart account-like behavior on standard wallets, developers can now build streamlined, consumer-grade UX that mirrors the simplicity of traditional finance and tech apps. Think:

• Single-click actions like “Swap Now,” “Send Funds,” or “Join Pool” without gas pop-ups.
• Smooth user workflows without disruptive wallet top-up notifications or mid-flow interruptions.

4. Global Reach, Especially in Emerging Markets

Many users around the world don’t have easy access to ETH—but they do have access to stablecoins like USDC. With EIP-7702, dApps can now:

• Onboard users with only USDC in their wallets.
• Reach populations where ETH liquidity is low or where currency volatility makes stablecoins more attractive.
• Offer payment and remittance services that are truly borderless and frictionless.

This opens up a huge opportunity for Web3 applications focused on financial inclusion, remittances, creator tools, and digital commerce.

From Complexity to Simplicity: Ethereum’s UX Revolution Starts Now

Ethereum is finally breaking down one of its biggest barriers: the requirement to hold ETH to participate. With EIP-7702 and stablecoin-powered gas payments, users around the world can now interact with dApps and send funds using just USDC. This means no ETH, no smart wallet deployment, no headaches.

Developers now have the tools to create single-click actions, sponsor user interactions, and onboard people without ever mentioning ETH. It’s a shift from crypto complexity to product simplicity, and it opens the door to true global accessibility.

For developers and financial institutions looking to ride this wave of accessibility, deliver better products and serve new users, infrastructure is key. Bitpowr enables scalable, secure digital asset operations by providing institutional-grade wallet infrastructure and custody solutions across multiple blockchains. Whether you’re building a DeFi protocol, payment platform, or consumer app, Bitpowr equips you to deliver on the promise of Ethereum’s new frictionless future.