Originally published on: October 21, 2024
In a recent announcement, Ethereum co-creator Vitalik Buterin introduced innovative solutions to address the centralization issues plaguing Ethereum’s staking and block production processes. Buterin’s proposals aim to combat the challenges faced during the “Scourge” phase of Ethereum’s technical roadmap.
Expressing concerns over the increasing centralization of staking pools, Buterin highlighted the risk posed by two entities that were responsible for producing a significant percentage of Ethereum blocks. This concentration of power could potentially lead to transaction censorship and other detrimental outcomes, according to Buterin.
Despite the fact that Ethereum currently has more than enough staked Ether to protect against 51% attacks, Buterin warned about the potential risks associated with further centralization of staking. To mitigate these risks, he suggested implementing caps on staking amounts and limiting penalties to ensure a more decentralized staking ecosystem.
Additionally, Buterin proposed a two-tier staking model, dividing it into “risk-bearing” and “risk-free” categories to promote a more balanced and secure system. This approach could help address the concerns related to block production centralization, as highlighted by Ethereum Foundation researcher Toni Wahrstätter.
By introducing these solutions, Buterin aims to prevent the worsening of transaction censorship and delays in block inclusion, which could have negative implications for Ethereum users. His proposals offer a promising path forward to address the current challenges faced by the Ethereum network and promote a more decentralized and secure ecosystem.
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