As Ethereum (CRYPTO:ETH) gears up for its Pectra upgrade in early 2025, a new report by Liquid Collective and Obol has highlighted significant risks associated with the update.

The report underscores the importance of client, operator, and cloud diversity, pointing out that a bug in a dominant client could lead to severe slashing penalties and network instability.

Staking through a single node operator also poses risks of downtime and slashing.

Additionally, the report stresses the necessity for a diverse geographical spread of validators and cloud providers to avoid single points of failure, emphasising the role of Distributed Validator Technology (DVT) in enhancing validator resilience.

The Pectra upgrade aims to consolidate stakes into fewer validators by raising the maximum effective balance to 2,048 ETH, which is expected to alleviate pressure on Ethereum’s communication layer.