Ethereum founder Vitalik proposes major changes to the network

Author: André Beganski Translation: Plain Language Blockchain

It turns out that Vitalik Buterin is not completely satisfied with the first major overhaul of Ethereum's consensus mechanism, despite years of technical polish and discussion.

In a blog post on Monday, the Ethereum co-founder proposed several potential improvements to Ethereum's proof-of-stake model. These include lowering the capital threshold for individual stakers and shortening the time it takes for Ethereum blocks to be confirmed.

Two years ago, the "merger" event completely changed the way Ethereum transactions are verified. Instead of relying on a network of computers that consume a lot of energy to ensure its security, Ethereum has turned to a system where validators stake assets to the network.

Validators are rewarded by packaging transaction blocks and verifying the accuracy of other blocks. In order to participate in this process, validators need to stake 32 ETH (about $84,000) as a "participation guarantee." However, Buterin believes that this threshold can be significantly reduced to 1 ETH (about $2,600).

"Polls have repeatedly shown that the main factor preventing more people from independently staking is the minimum threshold of 32 ETH," he wrote. "Lowering this threshold to 1 ETH will solve this problem, and then other issues will become the main factors limiting independent staking."

The growth rate of Ethereum network validators has slowed recently. According to beaconchai.in data, since the number of active validators exceeded 1 million in April, about 73,000 validators have joined. In the past month, this number has only increased by less than 3,000.

Lowering the staking requirements for Ethereum validators can also alleviate some concerns about the centralization of the network. Currently, Lido Finance, the leading decentralized ETH liquid staking platform, accounts for 28% of all staked Ethereum, according to data from the Dune dashboard.

The second part of Buterin's proposed improvement focuses on the issue of transaction finality. The term refers to Ethereum transactions that have been included in a block and cannot be changed once confirmed.

As of now, it takes about 15 minutes for Ethereum transactions to be finalized, Buterin wrote. This is because Ethereum's progress is measured in "epochs," each of which occurs approximately every 6.4 minutes. Each epoch consists of 32 "slots," and a new block is usually generated every 12 seconds.

After two epochs have passed, it will be almost impossible for an attacker to roll back an Ethereum block from a cost perspective, explained Chris Meisl, CTO and co-founder of Blocknative. At this point, you can consider it “extremely secure,” he wrote in a blog post last year.

Buterin also mentioned that “single-slot confirmations” will reduce final confirmation times to every 12 seconds. Combined with the reduced staking requirements, this will bring “Ethereum’s properties in line with those (more centralized) performance-focused Layer1 blockchains.”

However, Buterin also acknowledged that there are a variety of different implementations for “single-slot confirmations” to work, including brute force methods using advanced cryptography, or a two-tier system designed for stakers.

Buterin’s blog post comes at a time when discussion around Layer2 networks is growing. While Ethereum’s Dencun upgrade in March introduced a new way to help users reduce transaction costs, it also led to a period of inflation in Ethereum’s circulating supply.

Meanwhile, Ethereum core developers are preparing for the next major upgrade, Pectra. The first part of the upgrade is expected to be released early next year and will adjust the way Ethereum stakers are rewarded.