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Ethereum’s developers plan to increase the minimum amount of staked Ether required to become a validator by 64 times its original value.
According to the proposal, validators will hold a minimum of 2048 ETH tokens as opposed to the current value of 32 ETH. Ethereum migrated from the more energy-intensive Proof-of-Work to a Proof-of-Stake mechanism in 2022 during the Ethereum Merge.
This upgrade introduced validators to replace miners in confirming and securing transactions while staking a minimum of 32 ETH. However, this new proposal will likely meet mixed reactions from the current validators on the network due to its increased requirements.
Ethereum Validators Propose Hike In Validator Fees
Ethereum core developers made this proposal on June 15 in a consensus meeting with Ethereum Foundation researcher Micheal Neuder.
Neuder stated that the current limit of 32 ETH creates more inclusivity in Ethereum’s validators and makes the network more decentralized.
However, its leads to inflation in the number of validators on the network. He believes that a large increase in the ETH tokens required will improve Ethereum Network’s efficiency over time.
Also, Neuer advocated for the auto-compounding of validator rewards. He believes this feature will enable validators to earn more rewards on their staked ETH tokens.
To generate any staking income, rewards received that exceed the current limit of 32 ETH must move to another account. Neuder stated that raising the benchmark for validators will lead to rapid compounding of rewards.
Additionally, Neuder believes the current proposal will benefit large node operators like exchanges that currently manage numerous validators. However, this proposal received mixed reactions from the crypto community as they believe it will make the network more centralized.
A centralized network will ultimately defeat the core principles of cryptocurrency, which is a largely decentralized, anonymous, and scalable network.
The recent developments on Ethereum’s network could be boosting its current price recovery as it increased from the $1,600 price level on June 14 to $1,700 on June 15, where it currently trades.
JP Morgan Analyses Impact Of Hinman’s Documents On Ethereum’s Price
In a new development, JP Morgan shared insights on the recently released Hinman documents and their impact on Ethereum’s price.
Despite the US. Security and Exchange Commission (SEC) Efforts to keep the documents hidden, they were finally released to the public view. The documents revealed that William Hinman, in his now infamous speech in 2018, stated that Ether did not fall under securities.
JP Morgan believes these recent developments will reshape the crypto landscape and align other projects with Ethereum’s operating model.
Furthermore, he stated that this action would elevate Ether in the crypto market and shield the project from unnecessary regulatory pressure. Ethereum still retains its second-ranked position in the crypto market behind market leader Bitcoin.
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