Mike Neuder's proposal to raise the max effective balance of an Ethereum staking validator from 32 ETH to 2048 ETH seems like a great idea.

Anyone disagree?

https://ethresear.ch/t/increase-the-max-effective-balance-a-modest-proposal/15801

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Here's the video of the Ethereum consensus layer meeting queued up to the timestamp where Mike discusses the proposal:

https://www.youtube.com/live/ybgQuRcz9sg?t=59m33s

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That's fair. If your validator misses an attestation it will get slashed in proportion to the amount of rewards you would have received. Consolidating >32 ETH into a single validator would make this penalty more expensive.

In general, though, these penalties are entirely recoverable within a single subsequent block.

Raising the node limit presents higher risk of slashing. What I mean is If an organization runs one node with 2048 ETH, the capital risk of getting slashed is higher than running multiple nodes with 32 ETH.

I’m not a dev and that’s my simple observation. Maybe I’m wrong.

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Entirely. All it allows you to do is add more than 32 ETH to a single validator (up to 2048 ETH) instead of running multiple validators (w/32 ETH each).

If you want to run multiple validators now, they all operate on the same node anyway. This would just allow your ETH to consolidate into a single address.

Is it still "sufficiently" decentralized after this?

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Exactly! It's also better for smaller solo stakers to immediately restake their yield

One validator earns about 1.6 ETH/yr. If they want to compound their yield, they're most highly incentivized to dump it in Lido

Hopefully this proposal could alleviate some of that consolidation & help them maintain more sovereignty

Makes perfect sense once I got to the part about how yield is currently applied and that the cap creates an artificial sense of decentralization by causing big validators to acquire N validators from N-ETH/32 vs 1 validator with N-ETH > 32