Vitalik Buterin has again laid down suggestions to improve the Ethereum network by proposing revolutionary enhancements to staking pools and protocols. These enhancements will tackle security for Ethereum’s Layer 1 staking protocol and network centralization issues.
Buterin primarily addressed centralization issues on the Ethereum network by giving innovative solutions on decentralization of node operators. He says that most node operators across various staking pools are chosen by a handful of DAO members.
Vitalik suggests a better staking system
To combat these issues, Buterin advocates the adoption of a two-tier staking system reminiscent of successful projects like Rocketpool and Lido. This visionary system introduces Node Operators and Delegators as crucial participants. Node operators would take on the role of validators, running nodes to create new blocks and committing a specific amount of ETH to the staking pool.
On the other hand, Delegators would become pool members, staking their assets with their chosen node operators. This innovative setup empowers Delegators to select their preferred node operators, promoting a more decentralized and consensus-driven system.
Beyond addressing centralization concerns, the proposed two-tier system promises to fortify security within staking pools. It establishes a formidable barrier against potential attackers by allowing Delegators to determine node operators. Those seeking to become node operators without Delegator support would need to commit a significant portion of their ETH, potentially exceeding 2.08 million ETH. This substantial cost acts as a deterrent against hacking attempts.
Buterin emphasizes that implementing these recommendations could alleviate the issues currently plaguing the Ethereum Layer 1 staking protocol, encouraging a surge in node validators while reducing the number of required signatures from 800,000 to 10,000.
On CNBC, Vitalik Buterin shared his perspective on cryptocurrencies and their widespread acceptance. He highlighted the main obstacles and potential in the market, underscoring the need to reduce transaction costs to less than five cents per transaction and eliminate technical glitches. Buterin didn’t mince words when criticizing the dominance of centralized crypto exchanges, emphasizing the importance of supporting small, decentralized finance (DeFi) platforms for a more inclusive financial landscape.
Vitalik Buterin’s proposals are poised to reshape the future of Ethereum staking, offering solutions to centralization and bolstering security. His insights on the crypto market and the quest for a more inclusive financial landscape signal a visionary drive that could shape the industry for years to come.