Ethereum considers raising max validator balance from 32 to 2048 ETH

Ethereum core developers are considering raising the maximum validator balance from the current 32 ether (ETH) to 2,048 ether per validator.

As it stands, Ethereum validators are subject to an effective balance cap set at both the minimum and maximum of 32 ETH. This forces large-scale staking operations to spin up multiple validators if they want to earn yield on any amount greater than this.

Unsurprisingly, this practice has led to a big increase in the number of validators. There are currently 600,000 active validators and an additional 90,000 awaiting activation in the queue.

Michael Neuder, an Ethereum Foundation researcher and key proponent of the proposed change, made the case for this increase, during the most recent Ethereum core developer consensus meeting held on Friday. He said while the current validator cap promotes decentralization, it inadvertently leads to an inflation of the validator set size.

Neuder said that raising the cap could slow down the expansion of the active validator set — ultimately improving the network’s efficiency in terms of achieving finality within a single Ethereum slot.

Auto-compounding validator rewards on Ethereum

The proposed increased cap will also introduce the possibility of auto-compounding validator rewards, according to Neuder. At present, rewards earned beyond the 32 ETH cap must be redirected elsewhere to generate any staking yield. If the cap were to be lifted and raised, these rewards could immediately be compounded, providing validators with an effective means to earn more from their staked ETH.

Moreover, the proposal claims to address the operational concerns of larger node operators, including exchanges like Coinbase, which currently maintain tens of thousands of validators due to the existing 32 ETH cap per validator.

Raising the maximum effective validator balance would allow such operators to manage fewer, but higher stake validators, which could potentially translate into less complexity. Neuder warned, however, of the associated risks, including potentially higher penalties for accidental double attestations or proposals, also known as “slashing.”

This proposal continues to be under debate among the core developers, who have agreed to further discuss the implementation details of this proposal on social platforms such as ETHMagicians and Discord.

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