Ethereum co-founder Vitalik Buterin said Thursday at ETH
-0.68%
Taipei that one of the main challenges of Ethereum’s proof-of-stake mechanism is the potential centralization arising from general staking activity.
Regarding staking, Buterin noted a group of “lazy stakers” owning at least 32 ETH – the threshold to operate a validator – but choose staking pools and liquid staking tools over individual staking. He suggested that these stakeholders could have opted for “solo staking” to mitigate the risks of centralization.
“Even if solo betting becomes extremely easy, … many people will not bet,” Buterin noted in the release. speech.
“We already rely on social pressure, virtue and other things than economic incentives to solve our problems, even if they exist today,” Buterin added. “We shouted a lot to people not to all jump to the Lido. We yelled at people a lot to use different clients. There [are] a lot of people do these things voluntarily because it’s good for network security, but it’s not healthy to over-index these things.
Ethereum liquid staking protocol Lido has a total value locked (TVL) of $34.3 billion, according to The Block’s data dashboard. Lido’s high TVL makes it the largest validator on the Ethereum proof-of-stake blockchain, controlling 30% of the ether staked. Although Lido is a single protocol, it works with over 35 entities to run the nodes and manage the block production process. Other large staking service providers like Coinbase and Binance also control large amounts of ETH stakes.
Potential solutions
In a February post on a forum for Ethereum researchers, Barnabé Monnot of the Ethereum Foundation presented “rainbow staking» as a strategy to decentralize staking activities. This conceptual framework aims to involve protocol service providers, both “solo” and “professional”, participate as much as possible in a differentiated menu of protocol services.
Buterin described the essence of the concept as dividing staking into “heavy” and “light” categories. “Large stakes can be reduced and signed in each location,” he explained. “If you’re a light player, basically you’re only asked to sign every once in a while – as if it’s a lottery-based system… And whatever you do isn’t slashable . »
Addressing future plans, Buterin asked a crucial question: “In the long term, the key question is basically: there are clearly people who have ETH, who have a lot of ETH and who are lazy. What is the approach for them to participate? He explained: “If we don’t give a realistic answer, they’re just going to like throw all their money into a centralized thing… If we have a good answer to that question, then I think it should be possible to build a system very effective. an economical secure and very robust staking design around it.
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