During a recent Ethereum core developer consensus meeting on June 15, Ethereum Foundation researcher Michael Neuder proposed an increase in the minimum staked Ether required to become a validator. The proposal suggests raising the limit from the current 32 ETH to 2048 ETH, marking a 64-fold increase.
Neuder’s rationale behind the proposal is to strike a balance between decentralization and the inflation of the validator set size. While the current 32 ETH limit encourages more validators to join the Ethereum network, making it more decentralized, it also results in a larger validator set size.
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According to Neuder, implementing such a substantial increase would contribute to the long-term efficiency of the Ethereum network. In addition to the proposal for higher staked ETH requirements, Neuder also advocated for the auto-compounding of validator rewards.
Auto-compounding can maximize staked ETH benefits
By enabling auto-compounding, validators would have the opportunity to maximize their earnings from staked ETH. Currently, any rewards exceeding the 32 ETH cap must be transferred to a separate account to generate staking income. Raising the cap would allow validators to compound their rewards more effectively, providing a practical means to enhance their earning potential.
Neuder emphasized that the proposed changes would not only benefit the Ethereum network’s efficiency and validator earnings but also offer advantages to large node operators, including exchanges that manage numerous validators.
The existing 32 Ether limit has led to a significant increase in the number of validator addresses following Ethereum’s transition to a proof-of-stake network. Presently, there are over 700,000 validators, with approximately 90,000 awaiting activation in the queue.