Ethereum core developers plan to implement a 64-fold increase in the minimum amount of staked Ether (ETH) required to become a validator, from 32 ETH to 2048 ETH.
The proposal was made during a June 15 Ethereum core developer consensus meeting by Ethereum Foundation researcher Michael Neuder. The researcher noted that although the current limit of 32 ETH allows more validators to join the Ethereum network, making it more decentralized, 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. Besides the proposal to increase the minimum required staked ETH for validators, Neuder also called for auto-compounding validator rewards.
The auto-compounding of rewards would allow validators to make more money on their staked ETH. Currently, 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, which currently manage thousands of validators.
The 32 ETH limit has led to a significant surge in validator addresses after Ethereum’s transition to a proof-of-stake network. At present, there are over 700,000 validators, with around 90,000 awaiting activation in the queue.
Total Ethereum validators. Source: Beaconscan
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 fewer validators and thus make the network more centralized. Other users dismissed the idea and claimed it wouldn’t benefit the network.