Ethereum's Million Validators: A Time Bomb in the Crypto World?

The balance of validators on Ethereum has always been a major concern. The more validators there are, the more secure the blockchain becomes. However, an overabundance of validators can lead to issues such as failed transactions. Recently, this issue has been reignited within the crypto community. Here are the details!

The Million Validators on Ethereum: Security at Stake

While October 2023 saw a decline in crypto enthusiasts’ interest in becoming a ‘validator’ on Ethereum, this trend was short-lived. Apparently, the situation has changed: the number of validators on the blockchain has exploded.

Nr. of validator is issue (too many can ultimatively lead to failed transactions). But the max. effective staking amount (>32ETH) should mitigate that risk.

— Gabriel Weide (@AlphapingG) March 27, 2024

The Ethereum network has just crossed a major milestone with one million validators now active, reports Cointelegraph. It’s a significant milestone, demonstrating growing confidence in the blockchain. With 32 million ETH at stake, valued at over 114 billion dollars, securing the network has become a priority.

The tracking platform Dune Analytics reported this historic step on March 28th. The data shows that 26% of the total ETH supply is currently staked, providing a solid foundation for the network’s security and resilience.

Staking pools, particularly Ethereum Lido, are gaining in popularity. These platforms allow small ETH holders to participate in the staking process by pooling their resources, thereby reinforcing the decentralization of the blockchain.

Validators play a crucial role in protecting the network against malicious activities such as double spending. By engaging in the proposal and validation of transactions, they contribute to the reliability and robustness of Ethereum.

To become a validator, a minimum stake of 32 ETH is required. In return for their commitment, validators receive a reward in the form of ETH, thus encouraging ongoing participation and maintaining the security of the network.

Too Many Validators Kill Crypto Transactions!

In the world of Ethereum, security is an absolute priority. But with a million active validators, some experts are starting to worry. According to veteran investor Evan Van Ness, the current number of validators is already “too high,” a sentiment shared by stake pool manager Gabriel Weide, who fears “missed transactions,” as stated in the tweet above.

Peter Kim from Coinbase Wallet acknowledges that the impressive number of validators is partly due to the 32 ETH limit imposed. However, he suggests that changes may be on the horizon.

Vitalik Buterin Proposes Sanctions

In the race to decentralization, Ethereum visionary Vitalik Buterin has a new idea. On March 27th, he unveiled a plan to make the network fairer by penalizing validators based on their failure rates.

According to his proposal, validators would face harsher penalties for repeated failures. Buterin hopes to reduce the advantage large ETH holders have over smaller ones.

This isn’t the first time such an initiative has been advanced. In June 2023, researchers proposed capping the MAX_EFFECTIVE_BALANCE at 2,048 ETH, already sparking controversies within the crypto community.