Around 8 am on March 7, David Sacks, director of AI and cryptocurrency at the White House, posted on social media that President Trump had signed an executive order to establish a strategic Bitcoin reserve a few minutes ago. However, after this huge good news came out, the market did not seem to buy it and directly retreated by >5.6%. This seems to have become a daily routine recently, and every good news will fall. And eth and sol, which may be used as reserves, have not been spared. However, there seems to be a more important topic for eth and sol, that is, the major upgrade that is about to face: Ethereum's Pectra vs. Solana's SIMD-0228.
Quick overview of upgrades
Ethereum's Pectra upgrade and Solana's SIMD-0228 proposal are two important events in the blockchain field in 2025, representing different paths of technical optimization and economic model adjustment respectively.
Ethereum Pectra Upgrade
The Pectra upgrade is scheduled to be implemented in March or April 2025, combining the Prague and Electra phases to improve network performance and user experience. Research shows that it includes account abstraction (allowing gas fees to be paid with tokens such as USDC and DAI), staking optimization (increasing the maximum validator stake from 32 ETH to 2048 ETH), and smart contract optimization. Current data shows that about 33.8 million ETH is staked, accounting for about 28% of the total, and the reward rate is about 3.81% ( Datawallet ). This may attract more users, but the risk of centralization (such as large users controlling more nodes) is worth paying attention to.
The Ethereum Pectra upgrade was originally planned to be completed in one go, but the development team found that implementing all functions at the same time was too complicated and risky. Therefore, they decided to divide the upgrade into two phases.
Phase 1 (early 2025) : Focuses on direct improvements related to account abstraction and validators. These improvements will make Ethereum more user-friendly while increasing staking rewards.
Phase 2 (expected to be in 2026) : Introducing more technical optimizations, such as the EVM Object Format (EOF) designed to improve the efficiency of smart contracts , and PeerDAS technology to further enhance the scalability of Layer 2.
Pertra: The upgrade mainly includes the following aspects:
1. Account abstraction
2. Smart Contract Efficiency
3. Optimization for validators
4. Optimizing data management through Verkle trees
5. Layer 2 Solutions and PeerDAS
Solana SIMD-0228 Proposal
The 0228 proposal is to dynamically adjust the inflation rate according to the pledge rate, with the goal of maintaining a 50% pledge rate and reducing the issuance rate of SOL in the long term. Solana's current inflation model is a curve that gradually decreases over time. At the launch of the mainnet (March 2019), an inflation rate of 8% was set and it has decreased over time. The current inflation rate is about 4.8%, and the long-term target inflation rate is 1.5%-2%. If this proposal is passed, short-term staking returns will decrease (depending on the pledge rate between 1%-4.5%), and the long-term inflation rate will approach 1.5%. The current pledge rate is 70%, so if 228 is passed, the short-term staking SOL returns will decrease, the long-term issuance will decrease, and the staking yield rate will be adjusted in real time according to the pledge rate. It is worth mentioning that the newly issued SOL is regarded as ordinary income, at least in the United States, it is subject to tax. Therefore, there will be selling pressure proportional to the amount of issuance.
Solana's SIMD-0228 proposal will start voting on March 6, 2025, with the goal of reducing the SOL inflation rate from 4.5% to 0.87% through a dynamic emission mechanism. It adjusts emissions based on the staking participation rate: it reduces issuance when the staking rate is above 50%, and increases when it is below 50%. Currently, Solana's staking rate is about 63.43%, about 322.3 million SOL are staked, and the inflation rate is about 4.5%. This may stabilize the value of SOL, but the dynamic mechanism may affect market confidence.
Pectra is more comprehensive, covering the technical aspects; SIMD-0228 focuses on economic adjustments. Pectra may improve efficiency, but centralization is controversial; SIMD-0228 may attract investors, but emission uncertainty needs to be observed. In the future, on-chain data (such as changes in pledge rates) will reveal its actual impact.
Outlook
Ethereum’s Pectra upgrade and Solana’s SIMD-0228 proposal represent different paths for the development of public chains:
Pectra consolidates Ethereum's ecological advantages through comprehensive technical improvements, and is suitable for investors and developers who focus on long-term technology and user experience. The community's response seems to be cold. As of March 7, the date of writing, Ethereum Pectra testing has failed again, and empty blocks have begun to appear. Some developers have called for the mainnet upgrade in April or postponed, and ETH market sentiment has hit the bottom.
On the other hand, SIMD-0228 enhances the value appeal of SOL through economic model optimization. This proposal aims to adjust the issuance rate of SOL. It is proposed at this time point, essentially in the context of: - The Solana ecosystem has prospered since 2024, but trading activities have gradually begun to decline from All Time High; SOL has become a compliant asset and has shifted to ETFs and institutional assets. SOL's short-term selling pressure has increased, and long-term selling pressure has decreased, which can release liquidity or bring a short-term SOL on-chain market.
The success of both depends on the implementation effect and market acceptance. Pectra's centralization risk and SIMD-0228's market confidence impact will be the focus of future observations, and on-chain data (such as pledge rate and inflation rate changes) will become key indicators for evaluating their impact. We will wait and see in the next two months.
