After rising to a wait time of nearly three weeks, the Ethereum activation queue (the backlog of fully-funded validators waiting to be added to the active set on the Beacon Chain) waiting time has dropped back to less than a day. This is a level not seen since early March. What happened?
One of the more important drivers was a shift in the maximum number of validators added per epoch. Based on current parameters, once 327,680 validators are in the active set, the number of validators added per epoch will increase from 4 to 5, and an additional validator will be added per epoch for every 65,536 validators added to the active set after that.
On March 30, the Beacon Chain crossed 327,680 validators in the active set, and on May 27, the Beacon Chain crossed 393,216 validators in the active set, resulting in the current rate of 6 validators eligible for activation per epoch (1,350 per day). Since more validators can be added to the active set per epoch as the active set grows, the backlog in March would be eliminated over time, even if the same number of validators that were being activated per day in March continued throughout April and May.
In fact, the rate increased in April and May. In March, 28,219 validators were added to the active set, or approximately 910 per day. In April, this increased to 1,124 per day, and tapered off slightly to 1,104 per day in May. While recent validator activation rates have slowed, they are still significantly higher than they were earlier this year (435 per day in January and 428 per day in February).
Confidence across the space also took a bit of a hit in May: generalized sell-off across markets (including traditional capital markets), the Terra fiasco (see more here), the Ethereum re-org, etc, has caused some participants to pull back from engaging with the space.
The reorg on Ethereum was taken by some as a very negative event. Though not ideal, that negativity was overblown (see here for a write-up); TLDR: low-probability event, not malicious, will not affect the merge, most importantly the probability that this happens again becomes extremely small as we approach the merge and validators update their client software.
As participants have become reluctant and the line has shrunk, there is an irony in the core devs team continuing to report favorable results from testing – six largely successful mainnet shadow forks and preparation for the merge of Ropsten. The merge of the long-running testnets (Ropsten, Sepolia and Goerli) is the last phase before the merge of mainnet. At Permissionless a couple of weeks ago both Preston Van Loon (Prysmatic Labs) and Justin Drake (Ethereum Foundation) said August was a decent bet for the merge; the reorg does not change this.
Speaking of the backlog, what some might not be aware of is that there is a similar process for exiting validators. That is, a maximum number of validators can exit the active set per epoch. So when exiting the minimum wait is four epochs (~26 minutes) if there are no other validators waiting to exit. If there are other validators in the queue the wait is longer. Once exited, another wait of 256 epochs (~27 hours) is required before the stake and rewards are withdrawable. Since the ability to withdraw stake and staking rewards won’t be available until sometime after the merge (likely after the first couple of upgrades), it makes little sense to exit the validator set and have ETH locked up; this is likely why there is no backlog to exit the validator set nor has there been much reporting on it.
