Ethereum has seen its validator base cross the 500,000 mark ( and you can track it here ); courtesy the Shanghai update scheduled, and on track for March 2023. Itās a significant number, and hereās why ā
To set some more context, letās understand the Shanghai update first.
Ethereum.org tells us that ā Ethereum is the community-run technology powering the cryptocurrency ether (ETH) and thousands of decentralized applications.ā
Whatās the update about?
In simple words, The Shanghai update is like getting new tools for the big project Ethereum is. We all know its scale and the network capability, notwithstanding its scale, it needs regular security, speed and scalability interventions, and this is what the update will provide for.
Itās a planned upgrade to the Ethereum network that includes several changes to the Ethereum Protocol. The main focus of the upgrade is to improve the efficiency of the Ethereum Virtual Machine (EVM) and make it more robust. This will be done by implementing a new instruction set, called "Ethereum Instruction Set Architecture (EISA)" which will allow for more complex yet efficient smart contracts to be executed on the network.
Additionally, the update will also include changes to the Ethereum's consensus algorithm, which will help to improve the security and scalability of the network.
And who are these validators?
Validators = Participants on the network.
They are responsible for maintaining the integrity of the blockchain, and are rewarded for it. Maintenance and validation is done by verifying and processing transactions, and by creating new blocks to be added to the blockchain.
You see, most networks work on incentivising good behavior, and rewarding the participants for abiding by the rules.
All in all, these validators on the Ethereum network play a crucial role in maintaining the integrity of the blockchain and ensuring that the network functions smoothly.
As a validator youāll be responsible for storing data, processing transactions, and adding new blocks to the blockchain. This will keep Ethereum secure for everyone and earn you new ETH in the process.
source: https://ethereum.org/en/staking/
( you can also read more about staking & validators here )
Becoming a validator is a lengthy process, and is a story for a different day, but your first step to activation is to deposit 32ETH on the the network.
Okay, noted.. so how do these 500,000 validators matter?
The Ethereum network has relied on validators for its network, since the PoW to PoS hardfork that happened last year in September.
We just read that you need to deposit 32 ETH to become a validator, hereās how the picture unfolds after the Shanghai update ā
Validators whoāve staked their hard earned ETH, will finally be able to withdraw their ETH + rewards earned from having staked so far.
But, will this not lead to a significant number drop of validators? I could withdraw my ETH, my rewards & walk out of the system?!
Yes, possibly so!
To prevent a walkout or an exodus; withdrawals are capped at a total of 43,200 ETH / day.
Greater participation = greater efficiency and functionality of the network, and this enthusiasm shouldnāt die down.
In addition, our friendly neighbourhood Crypto wallet, Metamask, has recently introduced a liquid staking feature to make this task much easier, and more retail friendly. Users can now stake their ETH through MetaMask with liquid staking providers, Lido and Rocket Pool. You can read about it here.
Thatās about it folks!