Thank you for making this point about engaging community well in advance of such changes.
I just heard Justin Drake talk about this in an interview post Shapella launch. That triggered a discussion in the Rocketpool community, which led to this comment.
Currently there are around 500,000 validators, but only about 2,000 RP node operators.
If there is a cap on validators set at 2^19 = 524,288, then we are already at this limit and unfortunately the validator seats are predominantly owned by large staking farms. This seems to be in a stark contrast with ETH’s mission to decentralize at the social layer (layer 0).
Yes, there is the correlation penalty, but it does not seem like the broader community is aware of it and unless there are actual disastrous events that hurt delegating stakers, this penalty itself is not enough to incentivize solo staking.
IMHO before setting any limits on number of validators, there has to be a lot stronger incentive for solo staking. Something along the lines of proof of unique location or ZK KYC.
On a broader scope, for a time there was a public campaign to improve objective decentralization metrics such as Nakamoto coefficient, Gini Coefficient and Total Network Resilience. Is anyone still tracking these for ETH?