Proposal to increase max effective balance for Ethereum validators from 32 ETH to 2048 ETH.

The Ethereum network is continually developing amid mainstream adoption of cryptocurrency and blockchain technology. The network’s core developers are collaborating to enhance the decentralization aspect, with the proof-of-stake still in its early stages. Additionally, the network is accommodating global investors and different countries with varying crypto regulatory policies. The constant development to onboard new DeFi and users with different requirements has helped the network remain at the top of the smart contract industry.

Closer Look at Ethereum Proposal to Increase MaxEB

Top researchers and developers, including Mike Neuder, Francesco d’Amato, Aditya Asgaonkar, and Justin Drake, proposed an Ethereum proposal to increase the Max Effective Balance (MaxEB), which is currently a limit to Ethereum’s decentralization progress. Lower MaxEB limits the number of validators, but investors can delegate several thousand ETH in a staking program to add validators. The proposal aims to increase the MaxEB without raising the minimum amount required to become a validator, which would unblock future consensus layer upgrades, improve the performance of the current consensus mechanism and p2p layer, and enhance operational efficiency for both small and large-scale validators.

The immediate benefit of increasing MaxEB to solo stakers is the compounding of ETH rewards, allowing them to compete with large entities operating liquid staking programs like Lido (LDO), Coinbase Global Inc (NASDAQ: COIN), and Kraken. The Ethereum researchers want the MaxEB to be capped at 2,048 ETH, which would drastically reduce the current number of validators. The details of the proposal are open for discussion before the validators vote on the way forward.

Market Outlook

The Ethereum network remains the leader in decentralized finance and smart contracts adoption. According to Defillama, the Ethereum network has a total value locked (TVL) of about $24.7 billion with approximately 100 million non-zero addresses. Ethereum (ETH) had a total market capitalization of about $208 billion and a 24-hour trading volume of approximately $4 billion, trading around $1,727 on Monday.