Ethereum Proposes Custom Sweep Thresholds for Compounding Validators

Ethereum is considering a change that would allow compounding validators to set their own custom sweep thresholds for excess rewards. The proposal, outlined in draft EIP-8148, aims to give validators more control over how they manage their rewards.

Currently, 0x02 validators can increase their effective balance in 1 ETH increments up to 2,048 ETH, but any balance above this level is automatically swept to the withdrawal address. With the proposed change, validators would be able to select a custom threshold between 32 ETH and 2,048 ETH, allowing them to compound rewards until they reach that level.

The draft also includes a provision for new 0x02 validators to encode an initial threshold in their deposit, which would default to 2,048 ETH if not specified. Existing compounding validators could later submit a valid request to change their threshold.