2 min read
Overview
Ethereum’s Pectra upgrade allows validators to enable compounding interest, significantly increasing their maximum effective balance from 32 ETH to 2048 ETH. Validators can also consolidate multiple validator balances to streamline operations and maximize returns.
Upgrading to a compounding (Type 2) account and consolidation process are permanent and irreversible. Ensure you understand the implications before proceeding.
What You Will Do
- Upgrade your validator to a compounding (Type 2) account
- Consolidate validators
What You Will Need
- Active validator accounts
- Wallet for signing transactions
How to Enable Compounding Interest
To enable compounding interest, you need to upgrade your validator account from Type 1 (regular withdrawals) to Type 2 (compounding account). This process is done through the Ethereum Launchpad.
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Navigate to Ethereum Launchpad Validator Actions
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Connect your wallet and select your validator from the dropdown list
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Click Upgrade Account to transition from Type 1 (regular withdrawals) to Type 2 (compounding account)
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Confirm the upgrade details and sign the transaction with your wallet
Your upgrade request is now submitted. Processing may take several days to complete, after which your validator account will enable compounding interest with a MaxEB (Maximum Effective Balance) of 2048 ETH.
How to Consolidate Validators
Important: Wait until the compounding upgrade is fully confirmed on both execution and consensus layers before initiating a consolidation.
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In the validator actions menu, select the validator you wish to consolidate funds from
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Click Migrate Funds and select the target validator (compounding enabled)
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Verify details and confirm the transaction by signing it with your wallet
Important: Your validator account must remain online and continue performing consensus duties until the exit epoch has been reached.
Once consolidated, the total balance from the exiting validator is added to the target validator, allowing you to reach the higher MaxEB limit.
It is normal for a validator to exit before the effective balance appears on the target validator. This transfer takes time—so don't panic if the balance doesn't update immediately.
You can view consolidation actions for a validator using the Consolidation tab on beaconcha.in's validator pages. For example, see Validator 28's consolidation actions here.
Additional Resources
Conclusion
Congratulations! You've successfully upgraded to compounding interest and consolidated your validators, optimizing your Ethereum staking rewards through increased MaxEB.
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