Vitalik Buterin, co-founder of Ethereum, has addressed the issue of centralization in Proof of Stake (PoS) staking and proposed counter-incentive measures to promote decentralization. He shared his views at Farcaster and elaborated on the related strategies in the Ethereum research forum.
Summary:
Vitalik has previously introduced the concept of “Rainbow Staking” during his participation in ETHTaipei, aiming to increase the participation of individual stakers and improve the centralization concerns of the Ethereum network. Recently, he further discussed this issue on Farcaster and published a new article on the Ethereum research forum titled “Promoting Decentralized Staking through More Counter-Incentive Support.” In this article, he proposes a strategy to encourage decentralization through “punishing correlated behavior.” If a validator engages in improper behavior, including accidental situations, their punishment will increase as the number of validators engaging in such behavior (measured by the amount of ETH they hold) increases. Vitalik also defines two types of common failure scenarios, “fumbles” and “misses,” and provides calculations showing the higher probability of validators in the same cluster simultaneously missing proofs compared to validators in different clusters. Based on this, he suggests adjusting the rewards to support decentralized staking.
Vitalik presents four different punishment scenarios and assesses their impact on large, medium, small, and all validators. The results show that the “excess” punishment scheme can reduce the advantage of large groups over small groups, thereby promoting a more fair and decentralized staking system.
This proposal is currently under discussion, but Vitalik’s repeated suggestions for potential solutions indicate that Ethereum is gradually addressing the issues that may arise from excessive centralization in ETH staking.
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