ETH’s New Staking Solution To Improve Security
Ethereum has transitioned to a proof-of-stake (PoS) consensus mechanism to improve network security, efficiency, and scalability. The new design addresses current staking challenges, but still faces obstacles like a 32 ETH entry barrier for solo staking, risk of centralization with staking pools, and an additional number of signatures for each block.
Ethereum co-founder Vitalik Buterin proposed a two-tiered staking system to address challenges in the blockchain industry. He proposed a two-tiered system with node operators as validators, committing 32 ETH as a stake while running nodes that handle transactions and generate new blocks. Delegators, on the other hand, have stakes below 32 ETH and assign their stake to chosen node operators. They can choose which node operators they endorse and engage with consensus in lighter capacities. Buterin highlighted the benefits of this proposal, including enhanced scalability, reduced computational overhead, enhanced network security, and flexible staking solutions through smart contracts and liquidity tokens. He suggested implementing these changes at various levels of abstraction within staking pools or within the protocol itself. However, he recommended a minimal viable embedding approach, minimizing protocol complexity and economic changes while still achieving the desired goal.
(With inputs from Shikha Singh)
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