Ethereum core developers are planning to increase the minimum number of Ether (ETH) required to stake to become a validator by 64 times, increasing it from the current value of 32 ETH to 2048 ETH.
The proposal was made during the Ethereum core developer consensus meeting by an Ethereum Foundation researcher Michael Neuder. The researcher noted that although the current limit of 32 ETH makes way for more validators to join the Ethereum network and thus makes it more decentralized, at the same time it also leads to an inflation of the validator set size.
Neuder added that such a large increase would ultimately help the Ethereum network become more efficient over time. Apart from the proposal to increase the validator-staked ETH limit, Neuder also called for auto-compounding validator rewards.
The auto compounding of validator rewards would make way for validators to make more money on their staked ETH. Currently, in order to produce any staking income, rewards received in excess of the 32 ETH cap must be transferred to another account. These benefits could be rapidly compounded if the cap were raised, giving validators a practical way to increase their earn reward.
Neuder claimed the current proposal would not only make the Ethereum network more efficient and make way for validators to earn more money, but it would also help large node operators such as exchanges that manage thousands of validators at present.
Related: Hong Kong legislator invites Coinbase to the region despite SEC scrutiny
The 32 ETH limit has led to a significant surge in validator addresses after Ethereum’s transition to a proof-of-stake network. Currently, there are over 700,000 validators with around 90,000 awaiting activation in the queue.
The proposal received mixed reactions from the crypto community with several users pointing out that such a significant change in staked ETH would lead to a lower number of validators and thus make the network more centralized. Other users dismissed the idea and claimed it wouldn’t be beneficial for the network.
Magazine: Crypto regulation: Does SEC Chair Gary Gensler have the final say?