- This proposal has been released as part of the Deneb update
- It is under discussion
- The Ethereum Foundation researcher named arguments FOR introducing the limit
The Ethereum developers are considering increasing the maximum validator balance from the current 32 ETH to 2,048 ETH.
At present, Ethereum validators are subject to an effective balance limit that is set at a minimum and maximum value of 32 ETH. This results in the need to run multiple validators for large steaking transactions in order to generate revenue beyond this limit.
The consequence of this restriction has been an increase in the number of active validators, currently about 600,000, and nearly 90,000 more waiting in line to be activated.
The Ethereum Foundation researcher, Michael Neuder, made several arguments for why this should be done. He stated that while the current limit on validators promotes decentralization, it deliberately leads to an increase in the size of the validator set. And increasing the limit may lead to a slowdown in the expansion of the active validator set. Ultimately, this will improve the efficiency of the network.
In addition, he added that the increase to 2048 ETH will allow for the introduction of automatic rewards for validators. Currently, income of more than 32 ETH must be diverted to other sources to provide at least some income from steaking. However, if the limit is lifted and increased, these rewards can be automatically reinvested, giving validators an effective means of generating more revenue from ETH stacking.
Also increasing the balance may allow operators to manage fewer validators, potentially reducing the complexity of the process. However, Neuder cautioned about possible attendant risks, including potentially higher penalties for accidental double endorsements or suggestions, also known as “slashes.”