Why is the number of Ethereum validators constantly growing?
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At the end of 2020, ETH staking was launched. This means that you could become a validator, freeze your ETH and receive passive returns for supporting the Ethereum blockchain.
Since then, the number of ETH validators (stake holders) has been constantly growing.
At the moment, Ethereum is supported by more than 500,000 validators who have frozen more than 16 million ETH in the protocol and receive about 5% per annum for this.
Why does the number of validators never decrease?
Validators simply cannot withdraw ETH and rewards from staking. Such a rule)
If you had stuck 32 ETH in December 2020, then you would still not be able to withdraw your coins.
The ability to withdraw ETH will be the main innovation in the Shanghai update, which will be released in March this year. Validators will be able to withdraw their coins from staking after almost 3 years.
But that's not all: for the stability and security of the network, the validator will have to stand in line for the withdrawal of ETH. According to some forecasts, at first the queue may stretch for 70+ days.
What will happen when developers open the "doors" for ETH withdrawal?
Many expect strong volatility of the ETH price after the update, because some validators staked ETH when it cost about $500 — and some of them will want to lock in profits.
We are waiting for "analysts" who will predict the collapse of ETH and spread FUD. But it's better to just ignore this event than to try to make money on artificially dispersed panic and "play casino".
Another topic that many are concerned about is the decrease in the number of ETH validators after the update. This will reduce the security and decentralization of Ethereum.
There is no need to worry about this either, because reducing the number of validators increases the reward for staking, and this encourages new validators to connect to staking.
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