Vitalik Buterin contemplates Ethereum staking changes in blog post

Vitalik Buterin, co-founder of Ethereum, has shared a blog post outlining his opinion on adding certain protocols to Ethereum’s code versus keeping them “on top” of the blockchain.

The protocols Buterin discussed include account abstraction protocol ERC-4337, ZK-EVMs, private mempools, code precompiles, and liquid staking. Buterin came out more strongly in favor of ‘enshrining’ some protocols to Ethereum’s code, like ERC-4337, than others, like private mempools, but concludes that each presents “a complicated tradeoff” that will “continue to evolve over time.”

Buterin also expressed concerns toward the concentration of Ethereum’s liquid staking providers. The liquid staking pool Lido currently controls over 32% of staked ether, although this is spread across a variety of different validators. Buterin said that Lido and Rocket Pool, the top two providers, each have different risks and noted that they have some safety mechanisms in place — although these may not be enough.

Rather than relying on “moralistic pressure” to encourage using a more diverse set of staking providers, Buterin in his post contemplates changes to Ethereum’s protocol that would further decentralize liquid staking. This could include tweaking liquid staking provider RocketPool’s approach or giving a randomly sampled committee of small stakers extra governance powers.

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