Ledger & Pectra: Securely Entering a New Era for Ethereum

Before You Dive In:

• Ethereum’s Pectra upgrade introduced EIP-7702, allowing Externally Owned Accounts (EOAs) to temporarily function as smart contract accounts for transaction batching, gas sponsorship, and delegated actions.
• Pectra also introduced revolutionary staking features via EIP-7251 & EIP-7002, including auto-compounding rewards, a 2,048 ETH validator cap, and partial principal withdrawals.
• To mark the Pectra upgrade, enjoy zero service fees on ETH Staking rewards with Figment, P2P, and KILN via Ledger Wallet™  until the end of 2025.

Pectra was an important milestone for Ethereum, driving scalability and advancing the network’s capabilities. This upgrade introduced several enhancements, but two stood out for users: a fundamental upgrade to Ethereum staking through EIP-7251 and EIP-7002, and a major step forward in account abstraction with EIP-7702.

These staking changes revolutionized the process by enabling auto-compounding rewards, increasing the validator cap from 32 to 2,048 ETH, and allowing partial principal withdrawals—making staking more flexible and capital-efficient.

This latter proposal made it possible for Externally Owned Accounts (EOAs) to temporarily function as smart contract accounts, unlocking potential for features like transaction batching, gas sponsorship, and delegated actions. While EIP-4337 has garnered significant attention in the account abstraction space, EIP-7702 offered a more immediate path for users to experience some of the benefits without fully transitioning away from their familiar EOA capabilities. 

Ledger has been committed to supporting these advancements from day one, enabling you to take full control of your assets with uncompromising security. 

Here’s how Ledger is securely supporting this new era for Ethereum.

Our Secure Approach to EIP-7702

EIP-7702 enabled temporary smart contract functionality on existing accounts, bringing immediate benefits like bundled transactions and alternative gas payments. We’re excited about the possibilities EIP-7702 unlocks, but security is our top priority. For the initial rollout of Pectra support on Ledger signers, we took a cautious and secure approach. This approach prioritized the security of user funds by limiting initial interactions to well-vetted smart contracts. 

We will continue to evaluate the need for updates to this whitelist as the EIP-7702 ecosystem evolves.

• Device-Level Support for EIP-7702: Your Ledger signer is compatible with EIP-7702, enabling the transformation of your Externally Owned Account (EOA) into a smart account.
• Whitelisted Smart Contracts: To mitigate potential risks associated with unaudited smart contracts, we will initially only support interactions with the simple contract provided by the Ethereum Foundation. 
• In future, we may whitelist more complex contracts on the the list of implementations provided by the Ethereum Foundation, but only after careful consideration of the security risks and integration with Clear signing. Until then, all other contracts using 7702 will be blocked at the device level.
• No Immediate Smart Wallet Features in Ledger Wallet: While your device will support EIP-7702 on the embedded level, we will not be offering full smart wallet capabilities directly within Ledger Wallet at this time. This allows us to thoroughly evaluate the security landscape and user experience before integrating more complex features.

The Pectra Upgrade Transforms Ethereum Staking

For years, Ethereum staking has been rigid. The new features included in the Pectra upgrade through EIP-7251 and EIP-7002 have helped to create a more flexible and capital-efficient, ‘set-and-forget’ experience.

Previously, a validator’s effective balance was strictly capped at 32 ETH, meaning any rewards earned above this amount became idle capital that generated no additional yield. This system lacked flexibility, as rewards were not automatically added to the staking balance, and it was impossible to top up an existing validator. 

To increase a stake, a user had to accumulate another full 32 ETH and spin up an entirely new validator, creating significant operational overhead; a staker with 320 ETH, for example, would have to manage ten separate validators. Furthermore, withdrawals were an ‘all-or-nothing’ proposition, as it was impossible to withdraw only a portion of the 32 ETH principal without fully exiting the validator.

Pectra’s new features streamline this process entirely. The maximum effective balance increased from 32 ETH all the way to 2,048 ETH (EIP-7251), allowing you to stake 50, 100, or 1,000 ETH in a single validator and earn rewards on the full amount. This change eliminates idle capital and enables automatic compounding, as rewards are now rolled directly into your validator’s balance to earn their own yield without any manual action. 

This same EIP also introduced flexible top-ups, so you can add any amount of ETH—even just 1 ETH—to an existing validator at any time. EIP-7002 complemented this by introducing partial principal withdrawals, giving you access to your capital by allowing you to withdraw a portion of your stake, as long as the validator’s balance remains above 32 ETH. 

Finally, stakers can now consolidate multiple validators into a single one, drastically simplifying management. For pre-upgrade stakers, a simple one-time, on-chain operation to upgrade their credentials is all that’s needed to unlock this new, powerful era of Ethereum staking.

Important Note for Ledger Users

For those exploring the new possibilities offered by EIP-7702, Ledger has implemented support, but always with a strong emphasis on security. To utilize smart contract delegation via EIP-7702 on your Ledger signer, you will need to ensure you are using the latest version of the Ethereum application (reference this Help Centre article)

Furthermore, in this initial phase, this functionality will only be available for the simple 7702 contract provided by the Ethereum Foundation. More complex contracts using 7702 may follow, but only after careful consideration of the security risks.

For Ledger Nano S™ users, please be aware that as we are phasing out support you will be unable to update to version 1.17 of the ETH application, and therefore won’t be able to benefit from EIP-7702, but can still send ETH transactions and transfers using the existing version of the ETH application.

Released in 2016, the Ledger Nano S™ was a pioneering device in its time. However, due to its limited memory and technical capacity, it faces constraints when supporting newer, more advanced features. As the operating system and applications have evolved, the device’s ability to accommodate additional functionalities has naturally become more limited.

Looking Ahead

We believe the Pectra upgrade was a crucial step for all Ethereum users. We will continue to actively explore the full potential of both the new staking mechanics and the account abstraction features.

Our commitment remains to provide you with the most secure way to interact with the evolving on-chain ecosystem. The Pectra upgrade and our measured implementation of its features reflect this commitment. We’re eager to see the innovative use cases that will emerge and will continue to prioritize security every step of the way.

To celebrate this upgrade and make staking more accessible through Ledger Wallet, we’re offering zero service fees on ETH Staking rewards via our service providers Figment, P2P, and KILN. This offer is available directly in the ‘Earn’ section from now until the end of 2025.