Ethereum Network Celebrates One Million Validators Amid Decentralization Concerns
Summary:
The Ethereum network has reached one million validators, with around $114 billion worth of Ethereum (ETH), currently staked. According to Dune Analytics, this constitutes 26% of total ETH supply, with about 30% staked through Ethereum's staking pool, Lido. Some community members, including venture investor Evan Van Ness and staking pool operator Gabriel Weide, have expressed concerns about the possibility of having too many validators. In response to this growth, Ethereum co-founder Vitalik Buterin proposed a scheme to penalize validators based on their average failure rate to foster more network decentralization.
The Ethereum network recently celebrated a significant achievement, reaching one million validators, with an associated 32 million Ethereum (ETH) coins, or around $114 billion at the current market valuation, presently staked. On 28th March, the Dune Analytics platform, developed by Hildobby for tracking Ethereum's staking growth, reported that the network had attained this landmark validator figure. The 32 million ETH staked contributed to 26% of the total supply. The figures also revealed that approximately 30% of the ETH was staked via Lido, Ethereum's staking pool, which is a liquid staking network for proof-of-stake (PoS) cryptocurrencies. Smaller ETH owners frequent staking pools like Lido as it allows them to combine their assets for participation.
The security of a blockchain network is maintained by validators who monitor the network for any potentially harmful transactions, such as double-spending. In Ethereum's system, validators are involved in proposing and approving transactions within the network. To participate in these activities, validators must stake 32 ETH in exchange for a small portion of ETH as compensation. Although a large number of validators could mean greater network security, certain community members are speculating that an excess of validators could cause issues.
Prominent venture investor and Ethereum supporter, Evan Van Ness, expressed his suspicion that there might already be an excess of staked ETH. Gabriel Weide, who operates a staking pool, conjectured that an abundance of validators could ultimately result in "failed transactions". On a similar note, Peter Kim, the engineering head at Coinbase Wallet, commented that while the record number of validators was "impressive", it seemed "artificially inflated by the 32 ETH cap". He hinted at the possibility of this changing shortly.
As the validator count continues to surge, Ethereum's co-founder, Vitalik Buterin proposed a method to boost the network's decentralization. On March 27, Buterin penned a blog post suggesting penalizing validators in relation to their average failure rate. He put forth the idea that if many validators were unsuccessful in a given slot, the penalties would be higher for each failure. According to Buterin, this strategy could potentially level the playing field between larger and smaller ETH stakers.
Published At
3/28/2024 11:19:35 AM
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