Ethereum Foundation Researcher Michael Neuder has proposed increasing the maximum limit of the validator balance on Ethereum from the current 32 ETH. The proposal aims to raise the limit to 2,048 ETH, which would be 64 times higher than the current limit. Core developers are considering the proposal.
The suggestion, if accepted, would allow those who want to become validators on the world’s largest proof-of-stake network to hold over 2,048 ETH. According to Neuder, the current 32 ETH limit contributes to a stronger decentralization of Ethereum. Increasing the network’s size not only helps reduce the size of the validator set but will also ultimately lead to greater efficiency for the leading altcoin.
With the current limit, large validators such as exchanges and institutions have had to increase the number of validator nodes they operate in order to have sufficient stakes. However, as more people pay attention to stake rewards, the number of validators in Ethereum has remained high even after the Shapella upgrade. Currently, Ethereum has over 700,000 validators, with another 90,000 looking to join the network.
Part of the proposal also includes the idea of automatically compounding the staking rewards. This means that no ETH above the current cap would need to be transferred to another account, but rather rewards could be increased, allowing validators to earn higher staking income.
While core Ethereum developers discussed the potential pitfalls of implementing such a change, it was agreed that the discussions would continue. Specifically, the proposal aims to increase the limit while keeping the minimum stake at 32 ETH.
Overall, this proposed change has the potential to further decentralize Ethereum and make it more efficient. It would provide larger validators with an easier way to manage their operations and potentially attract more participants to the network. With ongoing discussions among core developers, it remains to be seen whether this proposal will be implemented and how it could impact the future of Ethereum.
