Ethereum's (CRYPTO:ETH) upcoming Pectra upgrade, expected in late 2024 or early 2025, introduces significant enhancements to crypto wallets and improves user experience.

Ethereum Improvement Proposal (EIP) 3074, approved for inclusion in the update, enables normal wallets to operate like smart contracts, offering features such as transaction bundling and sponsored transactions.

While security concerns exist, the update also introduces functions like social recovery and turns wallets into smart contracts with new operating instructions.

The Pectra upgrade follows the recent Dencun update, aimed at reducing layer-2 transaction fees, and aligns with Ethereum co-founder Vitalik Buterin's plans to simplify the network with the "Purge."