The Ethereum network has exceeded the milestone of one million validators, with about 32 million Ether, valued at approximately $114 billion, staked within its ecosystem.
As per insights from the Dune Analytics dashboard, dedicated to monitoring Ethereum’s staking progress, the number of validators reached the one million mark on March 28.
The 32 million ETH staked accounts for roughly 26% of the entire supply, underscoring the significant embrace of Ethereum’s proof-of-stake (PoS) consensus mechanism.
Lido Accounts for 30% of Staked ETH
Among the array of staking alternatives, approximately 30% of ETH is staked through Lido, an Ethereum staking pool designed to enable users with smaller ETH holdings to aggregate their assets and engage in the staking process.
Validators serve a critical function in upholding the security of the Ethereum blockchain by overseeing transactions to detect any fraudulent activities, like double-spending.
In the Ethereum network, validators propose and validate transactions, necessitating a stake of 32 ETH. In exchange for their involvement, validators earn rewards in the form of a share of ETH.
While a greater quantity of validators generally bolsters blockchain security, certain members of the Ethereum community voice apprehensions regarding potential challenges stemming from an excessive validator count.
Evan Van Ness, a venture investor and Ethereum advocate, has raised concerns that there might already be an “overabundance” of staked ETH.
Gabriel Weide, a staking pool operator, has cautioned that an excess of validators could result in a rise in “unsuccessful transactions.”
In an effort to address the network’s decentralization, Ethereum co-founder Vitalik Buterin recently put forward a proposal to enhance the system.
In a blog post, Buterin suggested a mechanism to penalize validators based on their average failure rate. This proposed approach would entail higher penalties if multiple validators fail within a given slot, potentially mitigating the advantage of larger ETH stakers over smaller ones.
SEC Postpones ETH ETF Decisions
The SEC has recently decided to postpone its rulings on the applications for Ether (ETH) ETFs submitted by major financial institutions such as BlackRock and Fidelity.
These decisions’ final deadlines have now been pushed back to May 2024.
This extension by the SEC follows its earlier delay in December 2023, during which it sought additional public feedback on whether these ETFs should be approved for listing.
In September 2023, Grayscale proposed the listing and trading of shares of its Ethereum Futures Trust ETF under the New York Stock Exchange Arca Rule 8.200-E.
ETF analysts James Seyffart and Eric Balchunas from Bloomberg Intelligence have both offered their cautious predictions regarding the impending approvals, anticipating a potential continued denial in May.
Balchunas remarked, “Our odds of ETH ETF approval by May deadline are down to 35%. I get all the reasons they SHOULD approve it (and we personally believe they should) but all the signs/sources that were making us bullish 2.5mo out for BTC spot are not there this time.”
