Ethereum reaches one million validators, raising concerns in the community

The ethereum network has reached a notable milestone by reaching one million validators.

According to data from the Dune Analytics dashboard developed by Hildobby, the amount of eth staked has increased to 32 million, worth approximately $114 billion at current market rates. This figure represents 26% of the total ethereum supply.

ethereum's new milestone

The data also reveals that around 30% of staked eth is attributed to Lido, a liquid staking platform designed for PoS cryptocurrencies.

Staking pools like Lido have become immensely popular among users, allowing people with smaller amounts of eth to pool their assets and participate in the staking process.

Over 1 million ethereum validators

pic.twitter.com/5Rlc6uB8EC

—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 exchange, 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 grow as number of validators increases

While the growing number of validators indicates greater security for ethereum, some within the community have expressed concerns about potential downsides.

Venture capitalist Evan Van Ness voiced concern over staking saturation, suggesting there may already be excess eth staked. Likewise, Gabriel Weide warned about the increased likelihood of failed transactions and operational challenges that come with a large number of validators.

Peter Kim, head of engineering at Coinbase Wallet, acknowledged the growth in the number of validators, but pointed Please note 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.

In response to 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, with the goal of mitigating the advantage of larger eth participants over smaller ones.

He theorized that individual validators with large stakes could potentially influence multiple identities, increasing the impact of any mistakes made. Buterin also highlighted the risk of correlated failures within groups of validators, such as staking groups, which share infrastructure and are more susceptible to synchronized outages.

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