
Vitalik Buterin, the founder of Ethereum, unveiled an innovative proposal this week aimed at repurposing the platform's staking algorithm.
With its vast user base, Ethereum's continued evolution is vital for its significant user base, with these proposed changes aiming to boost decentralization, efficiency, and security.
Buterin's main concern in his proposal concerns the limitations of the current staking system.
He notes that decentralization issues surrounding node selection across multiple staking pools andidentifies inefficiencies in the current layer 1 consensus mechanism.
The limited limitations of solo staking, together with concerns regarding liquid staking, mean that the platform can only process between 100,000 and 1 million BLS signatures per slot.
A further complication is the demand for accountability in signing, which necessitates a participation record for each signature. If Ethereum scales globally, using full danksharding for storage might still be difficult, with a mere 16 MB per slot serving around 64 million stakers.
Buterin's idea for a two-tiered staking system is a departure from Rocketpool and Lido's models, which has been followed by models used by Rocketpool and Lido. As central figures, Node Operators and Delegators emerge as central figures in this structure.
This model would require the change of the validator balance cap and the implementation of a balance threshold to categorize validators into these tiers.
Small-stakers' roles arecharacterized by their sporadic participation and non-slashable nature. This role tackles the significant issue of a potential 51% node operator majority attempting transaction censorship.
However, Buterin ponders these solutions in the context of staking pool features. He proposes protocols allowing validators to designate two staking keys: a permanent key and a temporary key, which, when combined, affect the block finalization process.
Buterin's proposal isn't just a technical fix, it's a vision for Ethereum's future. By decentralizing the staking process further and integrating safety nets, he seeks to achieve the goal of improving the safety nets for the future.
By disseminating the staking process and embedding safeguards, the objectives are clear: to empower those who typically lack the means for solo staking by offering them a meaningful way to participate and alleviate the transaction processing strain on Ethereum's consensus layer. This ensures a more accessible platform for everyone intending to run a validating node.
The proposed refinements underscore the pressing need for minimal, strategic protocol amendments, all pointing towards a balanced, decentralized, and high-functioning Ethereum network.