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, Fidelity Digital Assets wrote in a research report on Thursday.
Fidelity noted that “with the lowered risk from increased liquidity, the active validator count has risen by 74%,” and said “future roadmap upgrades will become more difficult” with this larger set.
The Shapella upgrade enabled withdrawals, for the first time, for validators who staked their ether (ETH) to secure and validate transactions on the blockchain.
A large validator count is a concern because “bandwidth and latency are critical in a large validator set network, where each validator must independently download the latest data and verify state change proposals within a small time frame,” analyst Daniel Gray wrote, adding that “the larger the block (data), the more computing power needed to process and re-execute the…