This week, Ethereum's creator, Vitalik Buterin, introduced a groundbreaking plan to enhance the platform's staking process. Being the second most valuable blockchain in terms of market cap, the ongoing development of Ethereum is vital for its extensive community. The suggested modifications seek to strengthen its decentralization, optimize performance, and bolster security.
He highlights the decentralization challenges in the node operator selection process across multiple staking pools and points out the inefficiencies in the current Layer 1 (L1) consensus approach.
Currently, the limitations of individual staking, along with concerns related to liquid staking, restrict the platform's capability to handle roughly 100,000 to 1 million BLS signatures for each slot.
Another complexity emerges from the signing accountability requirement, necessitating a log for every signature. Should Ethereum expand on a global scale, even using comprehensive danksharding for storage could be insufficient, offering only 16 MB per slot, enough for about 64 million stakers.
Taking cues from the strategies used by Rocketpool and Lido, Buterin proposes a dual-level staking model. Within this framework, Node Operators and Delegators become pivotal roles.
To address this, Buterin proposes a dual-level staking approach:
- A high-complexity tier subject to slashing with regular activity but a restricted number of participants (approximately 10,000).
- A simpler tier where members participate intermittently and have little to no risk of slashing.
Such a design would necessitate changes to the validator balance cap and the introduction of a balance threshold to classify validators into these respective tiers.
Buterin further examines these solutions considering the features of staking pools. He proposes protocols that let validators assign two staking keys: a consistent key and a transient one. Together, these keys play a role in the block finalization procedure.
Buterin's suggestion goes beyond mere technical adjustments; it outlines a roadmap for Ethereum's advancement. In further decentralizing the staking procedure and incorporating protective measures, his goals are to:
- Provide opportunities for those without the means for individual staking to still have significant involvement.
- Lessen the transaction handling burden on Ethereum’s consensus layer, simplifying the task of operating a validation node.
The recommended changes emphasize the immediate necessity for concise, tactical protocol adjustments, all aiming for a well-balanced, decentralized, and optimally performing Ethereum network.
