Ethereum Adopts Strategies to Strengthen Blockchain’s Decentralization

In a stunning twist in the Ethereum ecosystem, the blockchain has announced incorporating a large share of emergent “two-tiered staking,”a model representing two classes of participants, including Node operators and Delegators. Ethereum founder Vitalik Buterin took to X to share insights on the possible flaws of the emergent staking as well as the potential resolutions.

Protocol and staking pool changes that could improve decentralization and reduce consensus overhead: https://t.co/PvdKeYmObj

— vitalik.eth (@VitalikButerin) October 7, 2023

While the inclusion of Node Operators in the existing staking pools facilitates them to run nodes, it poses a threat to the notion of decentralization. Similarly, there are chances for an increased burden with the large share of liquid staking without actually providing sufficient benefits.

Elaborating on the possible roles that the delegators could take up “that meaningfully contribute to the decentralization and security of the network,” Buterin shed light on two aspects- delegate selection and consensus participation. While delegates can select the node operators to delegate their stakes, they can also “function as a check on node operators.”

Ethereum’s ultimate aim is to provide opportunities to individuals who do not own resources or capability to stake, by actively participating in staking and consensus. The project also intends to reduce the number of signatures the Ethereum consensus layer needs to process each time, finally leading to a more decentralized ecosystem.

In related news, a recent JP Morgan report unveiled the insecurities in Ethereum’s rising Ether (ETH) staking. Pointing out that Ethereum is becoming more centralized, the report cited, “Many in the crypto community had seen Lido, a decentralized liquid staking platform as a better alternative compared to the centralized liquid staking platforms associated with centralized exchanges”.

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