EIP-7251 introduces a new withdrawal prefix, 0x02 (compounding), and raises the maximum effective balance for validators from 32 ETH to 2,048 ETH, allowing large validator entities to consolidate their stake into fewer, higher-balance validators. This consolidation reduces redundant validator operations such as excess beacon node instances, P2P messaging, and BLS signature aggregation. As a result, it improves infrastructure efficiency, streamlines large-scale staking workflows, and lowers both computational and operational costs for major staking operators.