Crypto: Vitalik Buterin Reveals Flaws in Ethereum Staking

Vitalik Buterin, co-founder of Ethereum, recently sounded the alarm about what he sees as “one of the biggest risks” for blockchain: the centralization of staking. In a blog post published on October 18, 2024, Buterin details the potential danger and suggests a solution as part of a future update to the “Scourge” network.

Stake centralization: the main risk for Ethereum

Vitalik Buterin called centralized stakes “one of the biggest risks for Ethereum L1”. This phenomenon manifests itself mainly on two levels: the construction of blocks and the provision of stake capital.

Currently, only two players vote the content of around 88% of Ethereum blocks, increasing the risk of transaction censorship.

To combat this trend, Buterin offers several innovative approaches. One way is to set up an encrypted memory pool, which makes it harder for blockchain proponents to censor specific transactions.

Another solution being considered is the use of inclusion lists, where stakers would suggest a list of transactions that builders should include in the next block.

Towards reform of the betting system

When it comes to providing staking capital, Buterin points out that 30% of Ethereum’s supply is currently staking. Although this percentage is enough to protect the network against 51% attacks, a significant increase could lead to risks, including weakening the reduction effect and. excessive emission of ether.

To solve these problems, Ethereum’s co-founder suggests limiting the amount of ether a user can stake or implementing two-level stakes. This second approach would split the staked ether into two parts: a reducible part and another irreducible part.

These ideas are part of a broader approach aimed at equalizing fees between layers 1 and 2 of the network, while also paving the way for the next Pectra fork, planned for late 2024 or early 2025. The goal is to create a cohesive Ethereum ecosystem, capable of handling increased traffic without compromising its availability or decentralization.

In conclusion, Vitalik Buterin’s proposals to combat staking centralization demonstrate Ethereum’s continued commitment to addressing the challenges of mass adoption. The successful implementation of these solutions will be essential to maintain Ethereum’s position as a leading blockchain platform and ensure its sustainability in the ever-changing crypto environment.

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