This would significantly decrease “real” decentralization by effectively raising the 32 ETH solo staking floor to whatever the new EB value would be. Sure while one can still spin up a validator with 32 ETH, its influence would be one of a second-class citizen when compared to one with “maxed out” EB.
A few other observations:
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The SSF numbers you provided as rationale are straw-man numbers (quite literally - the linked Horn proposal calls them “A Strawman Proposal” and notes significant improvements are possible with multi-threaded implementation).
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You refer to the current 600K validator set as “artificially high” but the Ethereum upgrade road-map extensively uses 1-million validators as a scaling target. How can we currently be at “artificially high” levels despite being well under the original scaling + decentralization target?
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You point to the May 11th & 12th, 2023 non-finalization as evidence of undue stress on the P2P layer however the root cause of said event was due to unnecessary re-processing of stale data. The fact that there were clients that were unaffected (namely Lighthouse) shows that the problem was an implementation bug rather than being protocol level.
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The two pros listed under “validator perspective” are questionable. Sure, solo-stakers can now compound additional rewards, but at the trade-off of (potentially drastic) lower odds of proposals, sync committee selections, etc. This would be a huge net loss for the marginal 32 ETH solo staker. As for large-scale stakers, there is already tooling to manage hundreds/thousands of validators so any gain would be a difference in degree rather than kind, and even the degree diminishes by the day as tooling matures.