Vitalik Buterin, co-founder of Ethereum, has addressed the centralization issue in Proof of Stake (PoS) staking and proposed measures to promote decentralization. He shared his views on Farcaster and elaborated on the related strategies in the Ethereum research forum.
Summary:
Vitalik has previously introduced the concept of “Rainbow Staking” to increase the participation of individual stakers and improve the centralization concerns in the Ethereum network. Today, he further discussed this issue on Farcaster and published a new article on the Ethereum research forum titled “Promoting Decentralized Staking through More Anti-Correlation Incentives.” He proposed a strategy to encourage decentralization by “punishing correlated behavior.” The punishment for improper behavior of a validator will increase with the number of other validators engaging in the same behavior (measured by the amount of ETH held).
Vitalik also defined two common failure scenarios, namely “fumbles” and “misses,” which include instances where validators fail to provide proof of their activity. He calculated the expected and actual results of collective failures, including “fumbles” and “misses,” as well as specific data sets for a single time slot. The results showed a significantly higher probability of two validators within the same cluster missing proofs simultaneously compared to two validators in different clusters. This answers the question raised by Vitalik on Farcaster and suggests that rewards can be adjusted to support decentralized staking.
Furthermore, Vitalik proposed a concept of punishment rules to be applied in the context of decentralized staking. He demonstrated the impact of four different punishment schemes on large, medium, small, and all validators, with the results showing that the “excess” punishment scheme can reduce the advantage of large groups over small groups, thereby promoting a more fair and decentralized staking system.
Currently, this proposal is still under discussion. However, based on Vitalik’s multiple suggestions for potential solutions, Ethereum is gradually addressing the potential issues of excessive centralization in ETH staking.
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