The Ethereum network recently celebrated a key milestone, reaching one million validators, with 32 million Ether, approximately valued at $114 billion, currently staked. This achievement, as reported through the Dune Analytics dashboard created by Hildobby on March 28, represents a milestone for the network that involved 26% of the total ETH number of stakes.
Notably, nearly 30% of staked ETH is through the Ethereum staking pool Lido, which demonstrates the popularity of liquid staking platforms among users with smaller ETH holdings.
Validators constitute the central element of the Ethereum blockchain security system, which is responsible for identifying fraudulent activities for instance, double-spending. To become a validator, an individual must stake 32 ETH, receiving a reward for their participation.
However, the rising number of validators has become the subject of discussion within the Ethereum community, with some members and experts expressing concerns over potential issues stemming from this growth
Evan Van Ness, a venture investor and Ethereum supporter, has said that the amount of staked ETH may already be “too much.” This concern is echoed by Gabriel Weide, a staking pool operator, who warns of the possibility of “failed transactions” due to the high number of validators.
Conversely, while Peter Kim, the head of engineering at Coinbase Wallet, recognized the remarkable validator count, he critiqued it for being “artificially inflated.” He noted that this inflation was due to the 32 ETH requirement, hinting at potential changes to this threshold.
In response to discussions about decentralization and validator numbers, Ethereum co-founder Vitalik Buterin proposed adjustments. These adjustments would penalize validators based on their failure rates, aiming to balance the playing field between large and small ETH stakes.
This approach intends to ensure a more decentralized network by imposing higher penalties for failures during periods of widespread validator outages. On the other hand, the Ethereum market has shown resilience and dynamism, as demonstrated by the recent analysis of ETH/USD movements.
Following a pullback that unfolded as an Elliott Wave Double Three Pattern, Ethereum experienced a rally from the identified buying zone, reinforcing the positive momentum among investors. The market’s response, marked by a significant bounce, underscores the ongoing interest and confidence in Ethereum’s prospects.
