2024-03-29
The recent milestone of one million validators on the Ethereum network with 32 million Ether currently staked, valued at approximately $114 billion based on current market price has sparked discussions within the community about the potential implications of having such a large number.
Staking pools like Lido remain popular for users with smaller ETH holdings to participate in staking.
While validators play a crucial role in ensuring the security and integrity of the blockchain, some members of the community believe that an excessive number of validators could lead to certain challenges.
One concern raised by community members is the possibility of failed transactions. Gabriel Weide, who operates a staking pool, suggests that a high number of validators could increase the likelihood of failed transactions. This is because with more validators, there is a higher chance of conflicting transactions or delays in reaching consensus.
Gabriel Weide Tweet on Twitter (X)
Evan Van Ness, a venture investor and Ethereum advocate, goes further to argue that there may already be "too much" staked on the network. This implies that the amount of Ether being staked may have reached a point where it could potentially have negative consequences for the network's overall performance and stability.
Peter Kim, the head of engineering at Coinbase Wallet, acknowledges the impressive number of validators but believes that it is artificially inflated due to the 32 ETH staking requirement.
This requirement acts as a barrier for smaller ETH holders to become validators, potentially leading to a concentration of power among larger stakers.
In response to these concerns, Ethereum co-founder Vitalik Buterin has proposed a solution to improve network decentralization. Buterin suggests penalizing validators in proportion to their average failure rate.
By implementing this approach, the advantage that larger ETH stakers have over smaller ones could be reduced, leading to a more balanced and decentralized network.
