Ethereum

<p>The post <a rel="nofollow" href="https://coinpedia.org/news/is-ethereums-eip-7514-a-double-edged-sword/">Ethereum Puts the Brakes on Staking with EIP-7514; Here’s Why</a> appeared first on <a rel="nofollow" href="https://coinpedia.org">Coinpedia Fintech News</a></p> 
<p>The <a href="https://coinpedia.org/information/market-price-prediction-ethereum-2019/">Ethereum network</a> is no stranger to upgrades and improvements, but the latest Ethereum Improvement Proposal (<a href="https://eips.ethereum.org/EIPS/eip-7514">EIP-7514</a>) has the crypto community buzzing like never before. As part of the Ethereum Dencun upgrade, EIP-7514 aims to put a brake on the current speed of staking on the Ethereum network. The proposition may sound dull, but hang on; there’s more than meets the eye.</p> 
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   <p lang="en" dir="ltr">Hot off the press, some last min additions for Deneb:<br><br>EIP-7514 (Add max epoch activation churn limit). Target churn is 8<br>EIP-7516 (BLOBBASEFEE opcode)<br><br>They shouldn't delay upcoming devnet9 and Deneb</p>— terence.eth (@terencechain) <a href="https://twitter.com/terencechain/status/1702331211836948765?ref_src=twsrc%5Etfw">September 14, 2023</a>
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<h2 id="whats-the-fuss-about-eip-7514" data-name="whats-the-fuss-about-eip-7514" class="wp-block-heading"><strong>What’s the Fuss About EIP-7514?</strong></h2> 
<p>Firstly, what even is an EIP? For the uninitiated, EIP stands for Ethereum Improvement Proposal. Think of it as a blueprint for changes or additions to the Ethereum network. EIP-7514, in particular, aims to decelerate the rate at which ETH holders are staking their assets.</p> 
<p>If the current rate of staking continues unabated, the Ethereum network could potentially reach a point where half of its Ether is staked by May 2024. More alarmingly, that number could hit 100% by December 2024. While this may seem like robust community participation, it brings along its own set of problems—increased network strain and diluted staking rewards, which could disincentivize long-term staking.</p> 
<p>Read More: <a href="https://coinpedia.org/price-analysis/ethereums-surge-in-daily-active-addresses-eth-price-rebound-on-the-horizon/">Ethereum Daily Active Addresses Surge: ETH Price to Rebound Soon?</a></p> 
<p>Before EIP-7514, the number of validators (these are the good folks who process your transactions and create new blocks) could grow exponentially. However, more validators mean more messages and data to process, which could bottleneck the network.</p> 
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  <h2 id="ethereum-community-response" data-name="ethereum-community-response" class="wp-block-heading"><strong>Ethereum Community Response</strong></h2> 
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<p>Crypto influencer Dankard Feist <a href="https://twitter.com/dankrad/status/1702397991590474071">tweeted</a> in favor, arguing that the lower churn limit afforded by the EIP would give the community the time needed to research, debate, and implement solutions. </p> 
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   <p lang="en" dir="ltr">My reasoning on why I'm for EIP-7514. It is currently unclear if (especially liquid) staking will keep growing indefinitely. In the case that the withdrawal queue does not empty over the next few months, the lower churn limit will give the Ethereum community the time needed to…</p>— Dankrad Feist (@dankrad) <a href="https://twitter.com/dankrad/status/1702397991590474071?ref_src=twsrc%5Etfw">September 14, 2023</a>
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<p>On the flip side, Ethereum investor Ryan Berckman criticized the rushed nature of the proposal, claiming it could compromise the network’s neutrality.</p> 
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   <p lang="en" dir="ltr">My understanding is that EIP-7514 was considered too quickly, and the proposed urgency to cap validator growth doesn't align with the steadily shrinking activation queue.<br><br>EIP-7514 should be excluded <a href="https://t.co/l2yK5srNN9">https://t.co/l2yK5srNN9</a> <a href="https://t.co/ZMu4BoiR00">pic.twitter.com/ZMu4BoiR00</a></p>— Ryan Berckmans ryanb.eth
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   <img src="https://s.w.org/images/core/emoji/14.0.0/72x72/1f50a.png" alt="🔊" class="wp-smiley" style="height: 1em; max-height: 1em;"> (@ryanberckmans) <a href="https://twitter.com/ryanberckmans/status/1702336537114149106?ref_src=twsrc%5Etfw">September 14, 2023</a>
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<p>The Ethereum network has been on a roller-coaster ride since its inception, and EIP-7514 could be considered as hitting the “pause” button. It grants the Ethereum community the breathing room needed to make more informed decisions about its future.</p> 
<p>Also Read: <a href="https://coinpedia.org/news/how-did-bitcoin-and-ethereum-react-to-the-cpi-report/">How did Bitcoin and Ethereum React to the CPI Report?</a></p> 
<p>But, as with all things crypto, there’s a downside. Fast-tracking changes to staking parameters could compromise Ethereum’s commitment to maximum neutrality, a unique asset in an increasingly competitive crypto landscape.</p>

Ethereum Puts the Brakes on Staking with EIP-7514; Here’s Why

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