Ethereum Foundation researcher Mike Neuder recently suggested in an article titled “Issuance Issues” that Ethereum should address some of the current problems it faces by reducing token issuance in the next Electra upgrade, particularly in the face of centralization risks in Proof of Stake (PoS) staking. The proposal aims to “preserve the survival and proportionality of independent stakeholding compared to liquid staking.”
However, this proposal has faced opposition from within the Ethereum community. For instance, Eric Conner, co-author of the Ethereum Improvement Proposal EIP-1559, argued that Neuder’s proposal would weaken the community’s efforts to establish ETH as a currency. Similarly, Ahmad Bitar, a core Ethereum developer, opposed the proposal, stating that its goals were unclear and that the current issuance curve did not erode Ethereum’s value. Additionally, Ryan Berckmans, an Ethereum investor, expressed that the consequences of not changing the issuance curve were speculative, and it was currently unclear whether it would harm Ethereum and its community under normal issuance conditions.
Vitalik Buterin has also been concerned about the centralization risks in Ethereum’s PoS staking. In a recent post on Farcaster, he proposed a strategy to encourage better decentralization through “punishing correlated behavior.” According to his proposal, if a validator behaves improperly (including accidental situations), their punishment will increase as the number of other validators behaving improperly at the same time (measured by the amount of ETH held) increases. Vitalik also defined two specific cases for common failure scenarios, such as the occasional mistakes validators make called “fumbles” and “misses.”
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