thanks, Yorick! this is really helpful context
- We keep each “environment” to 1,000 keys, 32,000 ETH, for blast radius reasons. How many validator keys that is does not impact the operational overhead even a little bit. I am happy to unpack that further if warranted, if there are questions as to the exact nature of operational overhead.
this makes a lot of sense. i think some staking operators would like to reduce the key-pair management, but maybe it isn’t a huge benefit. (if the benefits for big stakers aren’t that high, then that is ok IMO. we care most about improving the health of the protocol and helping small stakers compete.)
- If I have validators with 2,048 ETH, how does that impact the slashing penalty in case of a massive f-up? I am asking - is there a disincentive for large stakers to consolidate stake into fewer validators?
right, slashing penalties still are proportional to the weight of the validator. this is required because consider the case where a 2048 ETH validator double attests. that amount of stake on two competing forks needs to be slashable in order to have the same finality guarantees of today. we see the slashing risk as something validators will need to make a personal decision about.
If I have validators with 2,048 ETH, does this reduce the flexibility of LST protocols to assign stake? For example, “the large LST” currently is tooled to create exit requests 32 ETH at a time, taking from older stake and NOs with more stake first. 2,048 ETH makes it harder for them to be granular - but at the same time so far there have been 0 such requests generated, so maybe 2,048 is perfectly fine because it wouldn’t be a nickel-and-dime situation anyway. Maybe someone at that LST can chime in.
i am not as familiar with the LST implications you mention here!
Followup thought: Maybe the incentive for large-scale staking outfits is a voluntary “we pledge to run very large validators (VLVs) so you don’t do a rotating validator set”
absolutely! again, we are proposing something that is purely opt-in. but encouraging it from a roadmap alignment and network health perspective is useful because any stakers that do consolidate are helping and should be recognized for helping.