Summary
Validator count on Ethereum blockchain has rapidly risen since Shapella upgrade, causing concerns about technical capacity and centralization. Fidelity Digital Assets notes increased risk from liquidity, making future roadmap upgrades more difficult. Large validator count poses concerns for bandwidth and latency, potentially leading to increased centralization over time. Unclear what the situation may be in a year from now, as staking demand is unpredictable.
Key Points
1. The rapidly rising validator count on the Ethereum blockchain following the Shapella upgrade in April last year is causing concerns about technical capacity and centralization, according to Fidelity Digital Assets.
2. Fidelity noted that the active validator count has risen by 74% since the Shapella upgrade, making future roadmap upgrades more difficult with a larger set of validators.
3. The increasing validator count poses challenges in terms of bandwidth and latency, potentially leading to centralization over time as validators struggle to keep up with network requirements.