Fidelity, which has assets worth $11.5 trillion under its management, shared a report expressing concerns about the future of the Ethereum blockchain.
On Thursday, March 28, Fidelity Digital Assets highlighted in a research report that the rapidly increasing number of validators on the Ethereum blockchain is causing concerns about technical capacity and centralization.
The report emphasized that the increase in the number of validators gained momentum especially after last year’s April upgrade to Shapella. It was noted in the report that each new validator adds an additional connection to the network, increasing the overall bandwidth required to maintain consensus:
“The potential concern is as the bandwidth requirements increase, non-performing validators might drop out of the network, and the dropouts are more likely to be self-hosted nodes. Therefore, rapid growth may be problematic due to centralization and bandwidth risks.”
Analyst Daniel Gray provided further details on the issue, addressing the technical problems brought about by the increasing number of validators:
Given the critical importance of bandwidth and latency in a wide validator set in the network, where each validator independently downloads the latest data and verifies status change proposals within a short time frame, a large number of validators is concerning. The larger the block, the more computational power is required to process and re-execute transactions before the next slot.
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