What is happening with Ethereum?
Ethereum creator Vitalik Buterin has published a new roadmap (a proposal for the future of Ethereum) in which he proposes to reduce the network load associated with a high number of validators. The number of validators is currently approximately 895,000. This large number enables decentralization and gives ordinary individuals the opportunity to participate in staking, but it burdens the network due to the huge number of signatures it has to process. According to Buterin, the workload and technical complexity are currently too high and need to be addressed. Buterin claims that the current signature collection system processes approximately 28,000 signatures per slot (12 seconds), creating complexity and not achieving the ultimate goal of as many transactions as possible for as little cost as possible.
Source: cointelegraph
What are Ethereum slots?
A slot is the name for a unit of time on the Ethereum network. A time period of 12 seconds is called a slot and is given for the network to choose a random validator to propose a block. Vitalik believes that reducing it to 8,192 signatures per slot (instead of the current 28,000) would reduce the technical complexity, and that the price of transaction fees would be drastically reduced, thereby enabling even greater acceptance and use of Ethereum on a global level.
Source: cointelegraph
Staking pools – ETH becomes centralized (option 1)
Ethereum is currently one of the most popular and innovative platforms for smart contracts and decentralized applications. However, its future may not be as decentralized as expected. Recently, Vitalik Buterin proposed three possible ways to increase the number of transactions per second and reduce transaction fees. One of these possibilities is to increase the minimum amount of ETH required for staking to 4096 ETH, and also the number of validators would be limited to only 4096. Given that staking would become drastically more expensive, and the number of validators would be limited, the centralization of Ethereum would inevitably occur. This would mean that only the richest and most powerful players on the network would be able to participate in maintaining the safety and stability of Ethereum, while small and average stakers would be forced to join decentralized staking pools or give up staking altogether. This could lead to more centralization and inequality on Ethereum, which would contradict its initial vision of an open platform for Web 3.0.
Source: cointelegraph
Two-layer staking (option 2)
Alternatively, Buterin proposed the introduction of a two-layer staking system, where validators would be divided into a “heavy” layer and a “light” layer. The heavy layer would be composed of validators with a minimum deposit of 4096 ETH, who would be responsible for the basic consensus mechanisms. A lightweight layer would include validators with no minimum deposit, which would contribute to the overall security of the network without the same level of direct participation in consensus, this option is slightly better, but will still contribute to the centralization of Ethereum in the long run.
Source: cointelegraph
Rotating participation (option 3)
As a last option, Buterin proposed a rotating participation approach, where for each slot a subset of 4096 validators would be randomly selected to participate in the consensus. This would ensure a diverse and dynamic set of validators while maintaining the efficiency, scalability and most importantly the decentralization of the network.
Source: cointelegraph
Conclusion
The proposed changes presented by Vitalik Buterin will drastically change the structure of Ethereum. With Ethereum taking a prominent position as the second largest cryptocurrency, these changes could reshape the Ethereum network itself and potentially impact the broader context of the crypto industry. It is important that these changes that occur in order to increase the overall efficiency of the Ethereum network take place while taking care of maintaining the decentralization of the network, and not that the network is only centralized and thereby achieve greater efficiency temporarily. We hope that you enjoyed today’s blog and that you learned something new. If you have any questions or suggestions, feel free to contact us on our social networks ( Twitter , Instagram ).
