Ethereum co-founder Vitalik Buterin has expressed dissatisfaction with the current state of Ethereum’s proof-of-stake (PoS) mechanism, even after significant changes brought by "The Merge" two years ago.
In a blog post published on Monday, Buterin proposed several enhancements to Ethereum’s staking system. One of the key suggestions involved reducing the financial barrier for solo validators, aiming to make staking more accessible.
Currently, validators need to lock up 32 ETH (approximately $84,000) to participate. Buterin suggested this could be lowered to 1 ETH ($2,600), which could encourage wider participation.
Reducing Staking Threshold
According to Buterin, the high staking requirement is a major deterrent for solo validators. He noted that surveys consistently show the 32 ETH minimum as the primary factor preventing greater participation.
Lowering this limit to 1 ETH would shift the bottleneck to other factors, potentially encouraging more individuals to secure the network.
The rate at which new validators are joining Ethereum’s network has been slowing. Since April, when the network surpassed 1 million validators, around 73,000 additional validators have joined, but fewer than 3,000 of these have come on board in the past month.
A reduction in the staking threshold might also alleviate concerns about centralisation. Currently, Lido Finance, a liquid staking platform, accounts for 28% of all staked Ethereum, raising concerns over the concentration of staking power.
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Transaction Finalisation and Single-Slot Finality
Buterin also addressed Ethereum’s block finalisation time. At present, it takes about 15 minutes for an Ethereum transaction to be confirmed as irreversible. This is due to Ethereum's structure, where progress is measured in epochs, each consisting of 32 slots.
In his post, Buterin proposed "single-slot finality," which would reduce finalisation times to just 12 seconds, bringing Ethereum in line with faster, albeit more centralised, layer-1 blockchains.
Achieving single-slot finality would require significant technical innovations, potentially including cryptographic solutions or a tiered staking model.
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Next Steps for Ethereum
Buterin's suggestions arrive amid wider discussions about the future of Ethereum’s layer-2 networks, particularly after the Dencun upgrade earlier this year. This update introduced lower transaction costs but also contributed to inflationary pressures on Ethereum's circulating supply.
Looking ahead, Ethereum’s developers are preparing for the network's next significant upgrade, Pectra, which is expected to tweak staking rewards and roll out early next year.
While Buterin’s proposals have the potential to make Ethereum more accessible and efficient, they raise new technical and governance challenges. Reducing the staking requirement could democratise participation, but Ethereum still faces centralisation risks. Additionally, the proposed changes to finalisation may be complex to implement.