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The Critical Concern for Ethereum: Managing Validator Set Size Growth

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Recent developments in the Ethereum ecosystem have highlighted the pressing issue of validator set size growth. Ethereum protocol developers made a controversial last-minute decision to address this problem in the upcoming Cancun/Deneb upgrade. While the decision has sparked debate within the Ethereum community, it underscores the importance of finding a solution to manage the rapid growth of Ethereum’s validator set.

The problem of validator set size growth has been a topic of concern among developers for several months. The proposal to cap the validator churn limit in Cancun/Deneb was first raised in July. Developers recognized the time-sensitive nature of the issue, as an excessively large validator set could strain the network’s capacity. Testing for the Holesky test network revealed the challenges of managing a larger validator set, prompting developers to design Holesky to support two times the size of Ethereum’s mainnet validator set.

Despite the efforts to address the problem, Ethereum’s validator set size continues to grow. As of September 15, 2023, there are already over 800,000 active validators on Ethereum, marking a 43% increase since the activation of staked ETH withdrawals in April. Without intervention, the number of validators is projected to exceed 1 million by year-end and reach 1.4 million by March 2023.

To mitigate this issue, Ethereum Improvement Proposal (EIP) 7514 introduces a cap on the growth of the validator set. This addition to the Cancun/Deneb upgrade provides developers with a few more months to address the issue. However, this stopgap solution is only temporary, as the validator set is still projected to surpass the size of the Holesky testnet.

The growth of Ethereum’s validator set is driven by the proliferation of liquid staking solutions, which lower the barrier to entry for users to stake their ETH. This trend suggests that the problem will only worsen over time if left unaddressed.

While the decision to include EIP 7514 in Cancun/Deneb was made relatively late, it demonstrates prudence on the part of developers. They are taking steps to ensure a predictable growth rate for the validator set while buying time to work on a more comprehensive upgrade. However, EIP 7514 is not a permanent solution, and developers must explore more aggressive measures to manage validator churn and increase the effective validator balance.

Community participation in the discussion of validator set size growth is crucial. The Ethereum community should actively engage in these conversations and hold developers accountable for their decision-making process. It is essential to raise awareness about the issue and push for long-term solutions that address validator growth and network monetary policy.

The broader Ethereum community should not be caught off guard by these developments. Instead, they should be driving the decision-making process and voicing their concerns about the urgent issues facing Ethereum. The issue of validator set size growth is real, serious, and demands immediate attention.

To learn more about this issue and the long-term solutions being considered by Ethereum developers, refer to the full Galaxy Research report here.

FAQs

  • What is the validator set size on Ethereum? Currently, there are over 800,000 active validators on Ethereum, and this number is expected to exceed 1 million by the end of the year.
  • Why is validator set size growth a concern? A larger validator set can strain network capacity and affect the efficiency and security of the Ethereum network.
  • What is the proposed solution to manage validator set size growth? Ethereum Improvement Proposal (EIP) 7514 introduces a cap on the growth of the validator set to address this issue temporarily.

Myth vs. Fact

  • Myth: The decision to include EIP 7514 in Cancun/Deneb was rushed and lacking in discussion.
  • Fact: While the decision might seem last-minute, it reflects the consensus among developers about the urgency of managing validator set size growth on Ethereum.
  • Myth: The inclusion of EIP 7514 is a permanent solution to the issue of validator set size growth.
  • Fact: EIP 7514 is a temporary measure that provides developers with more time to work on a comprehensive solution.

Tips and Advice

  • Stay informed: Keep up to date with the latest developments and discussions around validator set size growth in the Ethereum community.
  • Engage in the conversation: Share your opinions and concerns with the Ethereum community to ensure active participation and accountability.
  • Support long-term solutions: Advocate for research into effective ways to manage validator churn and increase the balance of validators on Ethereum.

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