Vitalik Buterin Warns of Ethereum Centralization Risks, Proposes Solutions Ahead of 'Scourge' Upgrade
October 21, 2024In a recent blog post, Vitalik Buterin, co-founder of Ethereum, highlighted proof-of-stake centralization as a critical risk to the network, particularly in light of the upcoming 'Scourge' upgrade.
Buterin warned that economic pressures could push smaller stakers to join larger pools, further exacerbating centralization risks.
These proposals reflect Buterin's commitment to maintaining Ethereum's decentralization while enhancing security as the network scales.
He cautioned that while Ethereum's security remains intact, increasing centralization could lead to longer transaction wait times, potentially extending from 6 seconds to 114 seconds.
His proposal includes a two-tier staking model that differentiates between 'risk-bearing' (slashable) and 'risk-free' (unslashable) components.
To mitigate maximal extractable value (MEV) risks, he suggested using inclusion lists for transaction proposals and implementing multiple concurrent proposers for block production.
Buterin also proposed redistributing responsibilities in block production by allowing stakers to choose transactions, while builders would organize them.
He expressed concern that currently, two entities control 88% of Ethereum blocks, raising alarms about potential transaction censorship and delays.
To combat these issues, Buterin proposed capping the amount of Ether that can be staked and limiting staking penalties to 12.5% of the staked amount.
He mentioned that an encrypted mempool could help reduce censorship risks by complicating the exclusion of transactions from blocks.
The cryptocurrency market is currently experiencing a resurgence, with positive trends for Bitcoin and Ethereum, suggesting optimism about their future.
Standard Chartered has projected potential increases in the valuations of Bitcoin, Ethereum, and Solana by 2025, aligning with Buterin's hopeful outlook on the long-term potential of cryptocurrencies.
Summary based on 6 sources
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Sources
Cointelegraph • Oct 21, 2024
Buterin pitches solutions to Ethereum’s staking, block production issuesBeInCrypto • Oct 20, 2024
Vitalik Buterin Suggests New Ethereum Upgrades to Safeguard Decentralization