By André Beganski
Compiled by: Vernacular Blockchain
It turns out that Vitalik Buterin wasn’t entirely happy with the first major overhaul of Ethereum’s consensus mechanism, despite years of technical polish and discussion.
In a blog post on Monday, the ethereum co-founder proposed several potential improvements to ethereum’s proof-of-stake model, including lowering the financial threshold for individual stakers and reducing the time it takes for ethereum blocks to be confirmed.
Two years ago, the “merge” event completely changed the way Ethereum transactions are verified. Instead of relying on a network of energy-intensive computers to ensure its security, Ethereum moved to a system where validators stake assets to the network.
Validators are rewarded by packaging transaction blocks and verifying the accuracy of other blocks. In order to participate in this process, validators need to stake 32 ETH (about $84,000) as a "participation guarantee." However, Buterin believes that this threshold can be significantly reduced to 1 ETH (about $2,600).
“Polls have repeatedly shown that the main factor preventing more people from independent staking is the 32 ETH minimum threshold,” he wrote. “Lowering this threshold to 1 ETH would solve this problem, at which point other issues would become the main limiting factors for independent staking.”
The pace of growth in Ethereum network validators has slowed down recently. According to beaconchai.in data, about 73,000 validators have joined since the number of active validators exceeded 1 million in April. In the past month, this number has only increased by less than 3,000.
Lowering the staking requirements for Ethereum validators could also ease some concerns about the centralization of the network. Currently, Lido Finance, the leading decentralized ETH liquid staking platform, accounts for 28% of all staked ETH, according to data from the Dune dashboard.
The second part of Buterin’s proposed improvement focuses on the issue of transaction finality, a term that refers to Ethereum transactions that have been included in a block and cannot be changed once confirmed.
Buterin wrote that as of now, it takes about 15 minutes for Ethereum transactions to be finalized. This is because Ethereum's progress is measured in "epochs," which occur approximately every 6.4 minutes. Each epoch consists of 32 "slots," and a new block is usually generated every 12 seconds.
Chris Meisl, CTO and co-founder of Blocknative, explained that after two epochs, it becomes almost impossible for an attacker to roll back an Ethereum block from a cost perspective. At this point, you can consider it "extremely secure," he wrote in a blog post last year.
Buterin also mentioned that “single-slot confirmations” will reduce final confirmation times to every 12 seconds. Combined with the reduced staking requirements, this will bring “Ethereum’s properties in line with those (more centralized) performance-focused layer 1 blockchains.”
However, Buterin also acknowledged that there are a variety of different ways to make single-slot confirmations work, including brute-force methods using advanced cryptography or a two-tier system designed for stakers.
Buterin’s post comes amid growing debate around Layer 2 networks. While Ethereum’s Dencun upgrade introduced a new way for users to reduce transaction costs in March, it also led to a period of inflation in the circulating supply of Ethereum.
Meanwhile, ethereum core developers are preparing for their next major upgrade, Pectra, the first part of which is expected to be released early next year and will adjust the way ethereum stakers are rewarded.
