Trouble on my left, trouble on my right, I've been facing trouble almost all my life. My sweet love, won't you pull me through? - Cage The Elephant
There are a few things that come to mind when we hear the word Ethereum.
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world’s second-biggest cryptocurrency
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boy genius Vitalik Buterin
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dApp development
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ETH to moon 🚀
However, the most important word surrounding Ethereum is actually decentralization.
Decentralization is where Ethereum has been truly successful. No matter if you compare new or existing layer-1s in the crypto verse, none of them will ever be able to compete with Ethereum in terms of decentralization.
How has Ethereum been so successful in decentralization?
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open source protocol development
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a massive ecosystem supported through community grants
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large enterprises pushing tooling such as Metamask, Alchemy APIs
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a massive developer ecosystem building various projects - Defi, NFTs, metaverse
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previously mining; and now staking by exchanges, enterprises, staking pools/firms
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putting Ethereum’s vision first
Ethereum has been able to solve a multi dimensional problem, and hence the reason why it has been so successful.
Now, there is a new proposal that is aiming to increase the staking balance from 32 to 2048.
There are very reasonable and plausible reasons to do so as described in the proposal.
However, increasing the staking balance to 2048 is potentially bad for a few core reasons:
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compounding rewards will help large validator pools to earn more, spin up more validators and propose more blocks in the long run
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currently, Lido controls 28.46% of validators. This will only enable larger entities like Lido to control a major share of the network
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reduces overall democratization of the network if not decentralization
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with enormous large size validator entities, the chokepoints will increase. It will be easy for entities like SEC to censor or enforce unnecessary and unfair regulations around it. We have seen this plenty recently
We need to look for more alternative solutions to solve the current challenges without raising the staking balance. Ethereum needs to stay decentralized and democratized.
This is the way of the Ether. Just another humble opinion.