04 Apr

Buterin's proposal focuses on penalizing validators according to how much their failure rates vary from average. 

By enacting fines for concurrent failures among validators, Ethereum co-founder Vitalik Buterin has unveiled a novel strategy meant to strengthen the platform's decentralization. 

By offering "more anti-correlation incentives," this proposal, which was posted on the Ethereum Research forum on March 27, seeks to encourage decentralized staking.

The main idea behind Buterin's proposal is to penalize validators that fail simultaneously and are controlled by a single entity more severely than they would be punished for individual failures. 

According to the idea, "any mistakes that you make would be more likely to be replicated across all 'identities' that you control," Buterin clarified. 

This raises the possibility of correlated failures, particularly in staking pools where there is shared infrastructure. 

Buterin's main proposal is to penalize validators according to the degree to which their failure rates differ from average.

To deter large stakers from generating widespread disruptions through correlated failures, each validator's penalty would grow in circumstances where a sizable number of validators fail simultaneously.

 This strategy, which is backed by simulations, may help level the playing field for big and small Ethereum stakeholders. Buterin's suggestion goes beyond fines alone.

It supports policies that support the economic sustainability of staking alone as opposed to participating in staking pools and promotes the usage of distinct infrastructures for each validator.

 Buterin has also hinted at the possibility of looking into other punishment plans and how these would affect the Ethereum network's client and regional decentralization.

 The dominance of staking pools and liquid staking services, like Lido, which presently owns a sizable chunk of the entire ETH supply staked, is also discussed in relation to staking decentralization.

This proposal is made in the midst of continuing conversations within the Ethereum community regarding the dangers of centralization and the requirements for safeguards to maintain a more fair and decentralized network, particularly in view of the sizeable portions of ETH held by services such as Lido and the possibility of "cartelization."

April 2024, Cryptoniteuae

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