The Protocol: Ethereum Struggles With Sprawl as Optimism Airdrops $27M

CoinDesk reported:

CROWD CONTROL: Ethereum has been so successful in attracting new validators for its proof-of-stake blockchain that the network is now starting to suffer from sprawl. There are nearly 800,000 active validators on the network, up about 41% since April’s “Shapella” upgrade, when withdrawals of staked ETH were first allowed, according to a Sept. 14 report by Galaxy Research’s Christine Kim. Based on certain assumptions, the number is on track to hit 1 million by mid-November and 2 million by June 2024. “Ethereum is getting close to reaching an unsustainable number of active validators,” Kim wrote. It’s pretty technical, but network “latency” is becoming a key problem, according to the report: There’s been “an increasing frequency of block reorgs and missed blocks in the first two slots of an epoch, likely due to increasing latency in attestation aggregation.” Developers have formalized EIP-7514 – an improvement proposal that would help, at least in the short term, by limiting entries of new validators to 8 per epoch (roughly 12 seconds), down from the current rate of 12. Another major concern from the rapid proliferation of validators, according to the Ethereum Foundation’s Dankrad Feist in a recent post, is that staking is becoming too concentrated in the hands of Lido, the biggest protocol for so-called liquid staking tokens. The plan to reduce the “churn limit” for new validators could be a stopgap measure for a more “elegant” fix down the road, Feist wrote.

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