Vitalik Buterin, co-founder of the Ethereum (ETH) network, published an article today, October 14, 2024, in which he detailed a proposal to improve the Proof-of-Stake (PoS) protocol. Proof of Staking) of this network.
Vitalik proposed, among other issues, reducing the participation requirement of staking from 32 ether (Ethereum’s native cryptocurrency) to 1 ether.
In the second instance, he announced another initiative that aims to Blocks on Ethereum are finalized in a single slot (slot) or interval of time, instead of several. That a block is “finalized” implies that the information it contains has already been confirmed on the network and cannot be reversed, which is crucial for its security and trust.
Currently this completion period (slot or time interval) in which a block is processed in Ethereum is 12 seconds. What Vitalik proposes is to reduce this time or maintain it without overloading the work of node operators to improve the efficiency of the network, allowing faster transactions and a better experience for users.
What does reducing the minimum staking amount on Ethereum mean?
Reduce the barrier in staking of Ethereum could result in a significant impact for users interested in participating in this procedure and obtaining rewards.
To be a validator on the Ethereum network currently requires a deposit of 32 ETH. At the time of this writing, that is equivalent to around $81,000. This figure is prohibitive and excludes many users from the possibility of participating in the consensus protocol of the network co-founded by Vitalik Buterin.
In this state of affairs, users with lower capital can only participate in this procedure through the pools of staking. The pools They pool funds from multiple users and centralize validation power.
The decrease of this threshold to 1 ETHwould expand access to staking and would cause a greater diversity of users become validatorsdistributing that power among a greater number of people. Next, by enabling more people to participate with a smaller amount of ETH, the network Ethereum would become more decentralized.
More validators equals more security of the Ethereum network. With a greater number of them, reduces the risk that a small or centralized group can manipulate the network or launch attacks. One of these is the 51% attack, as reported by CriptoNoticias. Diversity in block validation strengthens system integrity.
Additionally, validators on Ethereum also have some power in making decisions and updating the network. A threshold of 1 ETH would allow a greater number of users to participate in the decentralized governance of the network, increasing its representativeness.
Notwithstanding what has been said, a drastic increase in the number of users in the staking of Ethereum could overload the network infrastructure, demanding improvements to manage the greater number of nodes.
The three ideal improvements proposed by Vitalik Buterin
According to Buterin, the most complex task is finding a way to make block confirmation work with one slot and with many validators without overloading those who operate the nodes.
First of all, the Russian-American developer exposed improving the signature aggregation protocol. This refers to optimizing how cryptographic signatures (used to validate blocks) are combined and verified. Its objective is to improve the efficiency of the system, allowing process more transactions in less time.
Secondly, Vitalik proposed the integration of the “Orbit Committees”. This is a new mechanism that involves the creation of medium-sized validator committees selected randomly.
These committees are responsible for ensuring that transactions and blocks on Ethereum are confirmed securely. The idea is that instead of requiring all validators to participate in each slot or commit cycle, only a smaller, random number of validators do so.
This committee would guarantee the security of the network while reduces the number of participants in each validation cycle. By not requiring all validators to participate, the time and resources required to confirm blocks are reduced.
Ultimately, Vitalik proposed a process of staking two levels (two-tiered staking). This concept proposes to divide the participants of the staking of Ethereum into two categories based on the amount of ether locked: a “top tier” and “a bottom tier.”
In the first category, users will need to meet a higher deposit requirement (such as 32 ETH or more). These stakers They will have more responsibilities and would be directly involved in providing the economic purpose. That is to say, Your participation would be key to ensure that transactions and blocks are confirmed irreversibly.
For their part, the stakers with lower deposits (it could be 1 ETH, for example) they would have fewer responsibilities and rights, being able delegate your participation to a staker of the upper level to support these larger validators and share part of the rewards.
This “lower” group of validators will have the right to be part of inclusion lists. This describes a consensus mechanism where a random set of users of the lower level are selected to verify and confirm each block. Their testimony would be necessary to finalize the block and ensure its safety.
On this last point, it would be necessary to point out some of the differences between the “staking double” and the existence of pools of staking that monopolize retail users.
In principle, the pools They can be implemented more simply, since they do not require great technical knowledge when operating them. In contrast, this carries the risk of centralizing the power of validation in those who manage that pool.
In a system of staking Doubly, although lower stakers must trust those at the upper level when delegating their assets, this more actively involves lower validators, granting them rights. In return, their work becomes more complex compared to participation in staking pools.
One of the risks in this double staking system is that if an attacker managed to manipulate the inclusion lists of minor validators, could block block completion with only a small amount of ETH.
