The Ethereum network has reached a remarkable milestone by reaching one million validators.
Based on data from the Dune Analytics dashboard developed by Hildobby, the amount of ETH staked increased to 32 million, with an approximate value of $114 billion at current market rates. This figure represents 26% of Ethereum's total supply.
The new stage of Ethereum
The data also revealed that approximately 30% of the ETH staked is allocated to Lido, a liquid staking platform designed for PoS cryptocurrencies.
Staking pools like Lido have become extremely popular among users, allowing people with small amounts of ETH to pool their assets and participate in the staking process.
Over a million Ethereum validators
– Evan Van Ness 🧉 (@evan_van_ness) March 27, 2024
Validators play an important role in maintaining the security and integrity of the Ethereum blockchain. They monitor the network for suspicious or malicious activity, such as attempts to double spend ETH.
Participation in the Ethereum proposal and validation process requires validators to stake a minimum of 32 ETH. In return, they are rewarded with a portion of ETH as an incentive. By participating in the proposal and validation of transactions within the network, validators contribute to Ethereum's overall consensus mechanism.
Concerns increase as the number of validators increases
Although the growing number of validators indicates increased security for Ethereum, some community members have expressed concerns about potential downsides.
Venture capitalist Evan Van Ness Express concern about staking saturation, suggesting that there may already be an excess of ETH staked. Likewise, Gabriel Weide warned on the increased likelihood of transaction failures and operational challenges associated with a high number of validators.
Peter Kim, head of engineering at Coinbase Wallet, acknowledged the growth in validators but sharp It is worth noting that the current count could be inflated due to the 32 ETH staking requirement. However, he hinted at possible adjustments to this requirement in the future.
Addressing concerns about network centralization, Ethereum co-founder Vitalik Buterin proposed a solution to improve decentralization. In a recent blog post, he suggested penalizing validators in proportion to their average failure rate, in an effort to mitigate the advantage of larger ETH players over smaller ones.
He theorized that individual validators holding large holdings could potentially influence multiple identities, increasing the impact of any errors made. Buterin also highlighted the risk of correlated failures within validator clusters, such as staking pools, which share infrastructure and are more susceptible to synchronized disruptions.
2024 LIMITED OFFER for CryptoPotato readers at Bybit: Use this link to sign up and open a $500 BTC-USDT position on Bybit Exchange for free!