Vitalik Buterin, co-founder of Ethereum, has spoken out about the centralization issue in PoS staking and proposed measures to promote decentralization. He shared his views at Farcaster and provided detailed strategies on the Ethereum research forum.
Table of Contents:
Vitalik proposes “punishment for correlated behavior” to encourage Ethereum decentralization
The probability of missed proofs in a cluster is higher than that of individual validators
Punishment is proportional to the number of validators who miss proofs
The centralization risk of Ethereum’s PoS staking has always been a significant concern for Vitalik Buterin. Last week, when he came to Taiwan to participate in ETHTaipei, he introduced the concept of “Rainbow Staking,” hoping to increase the participation of individual stakers and improve the centralization issue on the Ethereum network.
Earlier today, Vitalik discussed this issue again on Farcaster:
At the same time, Vitalik published a new article on the Ethereum research forum titled “Promoting Decentralized Staking through More Anti-Correlation Incentives.” He proposed a strategy to encourage better decentralization through “punishment for correlated behavior.”
The suggestion is that if a validator engages in improper behavior (including accidental situations), their punishment will increase as the number of other validators engaging in the same improper behavior (measured by the total amount of ETH they hold) increases.
Furthermore, Vitalik defined two specific scenarios for common failures, such as “missed proofs,” which almost all validators occasionally make: (i) network failure during normal operation, and (ii) offline or long-term failure.
(i) Fumbles: when a validator misses a proof in the current period but provided the correct proof in the previous period.
(ii) Misses: when a validator misses a proof in the current period and also missed a proof in the previous period.
In the figure below, Vitalik calculated the expected and actual results of collective failures, including data on “fumbles” and “misses,” as well as “SSfumbles” and “SSmisses” specifically for a single time slot dataset.
The results show that the probability of two validators in the same cluster simultaneously missing proofs is significantly higher than that of two validators in different clusters. This answers Vitalik’s question raised on Farcaster. Therefore, we may consider adjusting the rewards to support decentralized staking.
Next, Vitalik presented a concept of punishment rules to be applied in the decentralized staking scenario. He demonstrated the impact of four different punishment schemes on large, medium, small, and all validators. The results showed that the “excess” punishment scheme can reduce the advantage of large groups compared to small groups, thus promoting a more fair and decentralized staking system.
Currently, this proposal is still under discussion. However, considering Vitalik’s multiple suggestions for possible solutions, Ethereum is indeed gradually addressing the potential issues caused by excessive centralization in ETH staking.
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