Ethereum to Penalize Large Validator Groups for Network Safety

Ethereum co-founder Vitalik Buterin has proposed a solution for correlated validation failures. This system seeks to decentralize blockchain. Ethereum Foundation analyst Toni Wahrstatter conducted a quantitative analysis, citing economies of scale promoting centralization in blockchain networks. Buterin's suggestion rectifies these issues by recommending penalties for related failures of validators under the same command.

The proposal seeks to level the ecosystem, enabling small validators to join. It assumes that validators within the exact same cluster have better-related failure risks because of shared infrastructure. This system charges penalties by moving the average for missed attestations. The objective is to stop big entities from governing numerous validators. Hence fostering a distributed network topology.

Solo Staking Gains Edge Over Pooling

The centralization of network management is criticized for staking pools, which usually hold big holdings. One big stake pool is Lido, which contains around $34 billion of assets. Buterin's idea may alter the present dynamic by including improved penalties for correlation failures in these pools. Such measures make solo staking economically more competitive than pooling.

— vitalik.eth (@VitalikButerin) April 9, 2024