Vitalik Buterin Introduces New Proposal to Enhance Security for ETH Staking
Ethereum co-founder recently introduced a series of solutions regarding decentralized protocols and staking pools. The solutions address the problems concerning security issues and the efficiency of decentralized projects.
The recent statements are supplement to the previous proposals that Buterin shared on account of changes taking place on the Ethereum protocol. He highlighted the challenges that investors are facing when staking token reserves.
Risks Associated with Centralized Node Operators
He also talked about the risk associated with the centralization of node operators and the increasing traffic on consensus layer. He retained that node operator selection in various staking protocols has decentralization issues.
At the same time, he claimed that the layer 1 consensus mechanism is also dealing with backlog for authorizing transactions. He introduced two-tier staking systems that are fashioned after Rocketpool and Lido protocols.
New Staking Solutions for DeFi
The two-tier staking solution used in the aforementioned decentralized protocols assigns delegators in addition to node operators as two main participants. In such as system, node operators are validators and responsible for running nodes, generating new blocks, and locking ETH in staking pools.
Meanwhile, delegators are pool members who stake their assets and assign their voting power to a given node operator. In this manner, delegators will be able to elect the node operator.
In addition to the staking governance, he also talked about issues surrounding centralized applications. The two-tier staking solution is also said to increment security for staking pools. This system works as a strong barrier against potential threats such as hackers and enable delegators to find the right candidate as a node operator.
Meanwhile, Node operators who do not have a considerable delegator support will need to stake a massive amount of ETH as high as one third of their total staking reserves.
In accordance with the two-tier staking mechanism, node operators without delegator votes need to stake around 2.08 million ETH. In this manner, the cost of launching a cyber security attack for hackers will become very high.
New Update will Solve Layer 1 Problems
Ethereum blockchain co-founder said that the upgrade will mitigate the problems that Layer 1 solutions on Ethereum blockchain are facing. At the same time, the new infrastructure will also bring democratic administration of decentralized applications and empower stakers to vote for a specified node.
This upgrade increases decentralization and individual participation. At the same time, the new system will reduce complexity. One of the important aspects is making dApps more user-friendly by reducing the total number of required signatures from 800K to 10K only. This also increment the total number of node validators.
These changes will allow staking protocols within the Ethereum ecosystem to mitigate staking problems and improve decentralization.
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