The Ethereum network has recently achieved a significant milestone, surpassing one million validators. Currently, there are 32 million Ether (ETH) staked, totaling approximately $114 billion based on current market prices.
On March 28, the Dune Analytics dashboard, developed by Hildobby to track Ethereum staking progress, displayed the achievement of one million validators, with the staked 32 million ETH accounting for 26% of the total supply.
Furthermore, the data revealed that around 30% of the ETH is staked using the Ethereum staking pool called Lido, which serves as a liquid staking platform for proof-of-stake (PoS) cryptocurrencies. Staking pools like Lido are favored by users with smaller amounts of ETH as it allows them to pool their assets and participate in staking.
Validators play a crucial role in maintaining the security of a blockchain by monitoring the network for any malicious transactions, such as double-spending. In Ethereum, validators are responsible for proposing and validating transactions within the network. To participate in this process, individuals are required to stake 32 ETH and receive a small portion of ETH as a reward.
While having a higher number of validators can enhance the security of a blockchain, some community members express concerns about potential issues with an excessive number of validators. Ethereum advocate Evan Van Ness suggests that there may already be “too much” staked, while staking pool operator Gabriel Weide believes that an abundance of validators could lead to “failed transactions.”
Peter Kim, the head of engineering at Coinbase Wallet, acknowledges the impressiveness of the number of validators but notes that it is “artificially inflated by the 32 ETH cap.” However, he suggests that this may change in the near future.
In an effort to improve the network’s decentralization, Ethereum co-founder Vitalik Buterin proposed a solution to penalize validators proportionally to their average failure rate. If a significant number of validators fail within a given slot, the penalties for each failure would be higher. This approach could potentially reduce the advantage that large ETH stakers have over smaller ones, according to Buterin.
As the number of validators continues to grow, Buterin’s proposal offers a potential solution to address concerns about centralization in the Ethereum network.