EIP-7514 is part of the Ethereum Dencun upgrade and is designed to prevent over-straining the network due to excessive staking. Current projections suggest that if the existing trend continues, half of all Ethereum could be staked by May 2024, escalating to three-quarters by September 2024, and potentially reaching full saturation by December 2024. This high level of staking could place undue stress on the network and may not necessarily enhance its security. Moreover, the rewards for staking could diminish to such an extent that they may not justify the effort.
The update also introduces changes in the rate at which new validators can join the network. Validators, who process transactions and generate new blocks, could previously increase exponentially in number. However, under EIP-7514, this growth will now follow a more controlled linear trajectory. This adjustment is crucial given that an influx of validators implies handling more messages and data, which could potentially slow down the network.
Discussions about rewards for staking are currently a hot topic within the Ethereum community. A consensus on how best to incentivize Ethereum staking has not yet been reached. The implementation of EIP-7514 will provide some breathing space for these discussions to continue and for researchers to investigate improved solutions.
In essence, EIP-7514 functions as a strategic pause for the Ethereum network, allowing its community to reassess and make well-informed decisions regarding its future. Given the rapid growth and transformation Ethereum has experienced since its inception, this pause is seen as necessary.
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Source: Cryptocurrency - investing.com
