Ethereum co-founder Vitalik Buterin has shared new insights on how to protect the blockchain's decentralization through proposed upgrades. In his latest essay, "Possible Futures of the Ethereum Protocol, Part 3: The Scourge," Buterin highlighted risks associated with Ethereum's Proof-of-Stake (PoS) system and how it can be improved to ensure the network remains decentralized as it grows.
In the post, Buterin discussed Ethereum’s centralization risks in its current staking process. He explained that issues like block construction centralization, economic pressures, and the 32 ETH minimum stake requirement contribute to this challenge. He also noted that hardware demands further discourage smaller players from participating.
One major risk to Ethereum’s core network, Buterin warned, is the possibility of large stakers dominating due to economies of scale. This would make it harder for smaller participants to compete, pushing them to join larger staking pools, which could increase centralization.
To address this, Buterin proposed breaking up the block production process to distribute tasks between builders and stakers. In this system, stakers would choose which transactions to include, while builders would only organize the transactions and add a few of their own. This approach is known as inclusion lists. He also mentioned the concept of Multiple Concurrent Proposers (MCP), which introduces systems like BRAID to spread the block production process across multiple entities, thus lowering participation barriers.
Buterin also raised concerns about over-staking, which could force Ethereum holders to stake their ETH just to keep up with others, potentially centralizing power in a few hands. Currently, about 30% of ETH is staked, and Buterin warned that if this number gets too high, it could drive more participants to centralized platforms. To prevent this, Buterin suggested adjusting Ethereum’s issuance curve so that staking rewards would drop if the total amount of staked ETH exceeds a specific limit, avoiding excessive control by a few stakers.
In conclusion, Buterin's proposals aim to maintain Ethereum's decentralization as it continues to grow. By tackling the centralization risks in staking and block production, he hopes to preserve the blockchain’s security and openness in the long term.
