In order to enhance the security, efficiency, and scalability of the network, Ethereum (ETH) has transitioned to the Proof of Stake (PoS) consensus mechanism. While the new design aims to address certain issues and limitations currently present in the staking process, there are still some obstacles to overcome. For instance, participants face a significant entry barrier with a minimum of 32 ETH to stake individually. Additionally, stake pools and the excessive number of signatures required for each block pose a centralization risk.
Two-Layer Stake Solution for Ethereum
Vitalik Buterin, the co-founder of Ethereum, outlined potential solutions to address these issues in a recent blog post. One of the solutions proposed by Buterin is the implementation of a two-layer stake system consisting of two participant categories: node operators and delegators.
Currently, node operators on the Ethereum network act as validators, stake 32 ETH, and run nodes that process transactions and generate new blocks. Violating ethical standards or engaging in malicious behavior can subject them to severe penalties.
Delegators, on the other hand, stake ETH below 32 and allocate their shares to selected node operators. Although they do not operate nodes themselves, they have the freedom to choose which node operators to support and participate in the consensus mechanism with lighter capacities.
Benefits of Buterin’s Proposed Solutions
Buterin’s argument emphasizes the numerous benefits that the proposal can bring to the network and its users. From a network perspective, the proposal has the potential to achieve various advantages. Firstly, it can significantly enhance scalability by reducing the number of signatures per block to approximately 10,000 and minimizing computational load.
Moreover, it can bolster network security and decentralization by increasing the difficulty level for attackers aiming to control the majority stake. Furthermore, this proposal enables more creative and flexible staking solutions through the usage of smart contracts (dApps), adoption of liquidity tokens, and other mechanisms.
Additionally, these changes highlight the possibility of implementing them within stake pools or between them, as well as in various abstraction layers within the protocol itself. As a result, a minimalistic protection approach that minimizes protocol complexity and economic changes while achieving the desired goal is feasible.
