The post Vitalik Buterin Reveals “Great Danger” About Ethereum appeared on BitcoinEthereumNews.com.

Ethereum (ETH) co-founder Vitalik Buterin has expressed concerns about the centralization of staking within the network, which he describes as “one of the biggest risks to Ethereum layer-1” in a recent blog post. Part of a series covering the future of Ethereum, the article outlines strategies to mitigate this risk as part of Ethereum’s planned “Scourge” upgrade. Buterin has previously discussed Ethereum’s transformative “Merge” and “Surge” upgrades, which have ambitious goals of enabling 100,000 transactions per second across both Layer 1 and Layer 2 networks. Now, the focus has shifted to the dangers of staking centralization in proof-of-stake and how it could impact the long-term health of the network. In his blog post, Buterin highlights two critical areas where centralization risks arise: block creation and staking capital provision. He warns that economic pressures could push Ethereum toward greater centralization, potentially undermining its decentralized nature. Buterin says he’s particularly concerned about block creation and maximum extractable value (MEV), a situation where certain people can extract value by selecting specific transactions to include in blocks. He notes that currently, around 88% of Ethereum blocks are only managed by two parties, increasing the risk of censorship and transaction delays. This could have serious consequences, especially for time-sensitive transactions like liquidations or token swaps. To mitigate this, Buterin suggests the possibility of using an encrypted mempool, which would make it more difficult for block proposers to censor transactions. However, he notes that the design should be “robust, reasonably simple, and ready to be included in an upgrade.” Buterin is also exploring other approaches to combat MEV, including the use of inclusion lists (where stakers suggest transactions that founders should include in the next block) and using multiple concurrent proposers to split the block production process among several participants. There are tradeoffs to these solutions,…

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Filed under: News - @ October 20, 2024 9:11 pm