- Ethereum’s success post-‘Merge’ sees almost 1 million network validators, raising concerns about network sprawl.
- The Optimism network airdrops $27 million, signaling strong financial momentum even during challenging times.
Ethereum’s Network Sprawl Dilemma
It’s been a year since Ethereum‘s monumental “Merge” transitioned it to a more sustainable proof-of-stake network. But with success comes challenges. Ethereum’s staking popularity is skyrocketing, pushing the number of network validators perilously close to the 1 million mark. Such rapid expansion gives rise to network sprawl issues, which Ethereum’s developers aim to tackle with the EIP-7514 proposal.
Managing the Network Overload
Post the “Shapella” upgrade in April, the Ethereum network experienced an influx of validators. As per Galaxy Research’s Christine Kim, the current count nears 800,000, marking a 41% rise since the upgrade. If this trajectory holds, Ethereum may see 1 million validators by November and possibly 2 million by June 2024.
This sprawl isn’t just a number game. Ethereum faces increased “latency” challenges, reflected in frequent block reorganizations and missed block occurrences, especially at the start of an epoch. This latency issue, largely attributed to delays in attestation aggregation, is technically intricate but crucial for the network’s health. Developers are considering EIP-7514 to address this. The proposal suggests a limit on new validator entries to 8 per epoch (around 12 seconds), a decrease from the current 12.
However, there’s more to the sprawl than just technicalities. The Ethereum Foundation’s Dankrad Feist points out another concern: the increasing concentration of staking in Lido’s hands, the leading protocol for liquid staking tokens. Implementing a short-term solution to control the entry of new validators could pave the way for a more refined solution in the future.
Optimism’s Financial Boost: The $27M Airdrop
Switching gears to the layer-2 blockchain Optimism network, much buzz surrounds the OP Stack—a toolkit to generate new layer-2s, essentially modified versions of Optimism. A notable instance is Coinbase’s Base blockchain, whose rapid rise in project rankings last month can be attributed, in part, to the Friend.tech social media platform’s popularity.
But nothing propels optimism like free money, and the Optimism Foundation knows it. Their third community airdrop saw over 31,000 unique addresses receive roughly 19 million OP tokens, valued at a whopping $27 million. Even in the crypto winter’s depths, certain teams are flush with token reserves, driving user engagement on emerging networks. The foundation has earmarked an additional 570 million OP tokens for future airdrops.
Side Note: Avalanche’s infamous developer, Daniele Sestagalli, is back in action with WAGMI, encapsulating the crypto sentiment of
“We’re all gonna make it.”