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ethereum (eth) co-founder Vitalik Buterin advocates lowering the individual eth staking requirement to lower the barrier to entry and promote greater decentralization of the network.
Buterin sees 32 eth requirement as a barrier
Responding to ethereum educator Anthony Sassano on x regarding solo betting, Buterin x.com/VitalikButerin/status/1841756178692358587″ target=”_blank” rel=”nofollow”>voiced There are concerns that the current 32 eth requirement presents a bigger hurdle than bandwidth limitations.
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For those unfamiliar, solo staking on ethereum requires an individual validator to stake at least 32 eth, approximately $75,200 at the current market price of $2,352. Individual staking allows cryptocurrency investors to earn passive income while directly contributing to the security of the ethereum network.
Buterin sees this high entry threshold as a barrier preventing smaller eth holders from participating. He suggested temporarily increasing bandwidth requirements to reduce the minimum staking deposit to 16 or 24 eth. Buterin explained:
It is clearly good for both accessibility and scale. Then once we calculate the peerdas, the bandwidth requirements go down again, and once we calculate the SSF orbit, the minimum deposit can go down to 1 eth.
It is important to note that eth holders can still place bets with as little as 1 eth by using third-party staking services, centralized platforms, or staking pools. However, these options do not offer the same level of control over eth as individual staking, where the node operator retains full custody of their holdings.
During the ethereum Singapore 2024 event in September, Buterin emphasized the importance of individual participants in bolstering ethereum's security and decentralization to address potential 51% attacks.
At the event, Buterin said that even a small increase in the proportion of individual participants on the ethereum network could function as an “additional layer of defense” for both security and privacy.
ethereum Layer-2 Solutions Continue to Thrive
While the 32 eth barrier may discourage small-scale eth enthusiasts from staking solo, they can still benefit from the growing popularity of ethereum layer 2 solutions, which have made transactions more affordable.
For example, in June 2024, the Optimism layer 2 scaling platform announced launching open-source, permissionless failsafes, allowing users to securely verify the validity of off-chain transactions.
Similarly, in August 2024, asset manager Franklin Templeton approved another Layer 2 solution when launched your OnChain US Government Money Fund (FOBXX) on the Arbitrum network.
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Similarly, crypto exchange Coinbase's ethereum Layer 2 accrual base has witnessed rapid adoption as its total value locked (TVL) currently stands at just over $2.12 billion, according to data from DeFiLlama.
As Layer 2 solutions continue to be successful, their positive impact may extend to the ethereum network. Cryptoanalysts, such as CryptoBullet, predict that eth could recover in the fourth quarter of 2024. eth is trading at $2,352 at the time of this publication, down 3.5% in the last 24 hours.
Featured image from Unsplash, chart from Tradingview.com
