Vitalik Buterin, co-creator of Ethereum, has suggested several solutions to address concerns about staking and block production centralization on the Ethereum network. In an October 20 post, Buterin warned that economies of scale in staking are causing smaller staking pools to move to larger ones, with just two entities responsible for producing 88% of Ethereum blocks in early October.
Buterin sees staking centralization as one of Ethereum’s major risks, which could lead to issues like transaction censorship. He emphasized that while the 30% of Ether currently staked is sufficient to protect the network from 51% attacks, further centralization could bring new risks.
To tackle these problems, Buterin proposed capping the amount of Ether a user can stake and limiting penalties for staking failures to 12.5% of the staked amount. He also suggested a two-tier system for staking, where users could choose between higher–risk “slashable” staking and lower–risk “unslashable” staking.
Buterin’s concerns are backed by research showing that two block builders, Beaverbuild and Titan Builder, controlled nearly 89% of Ethereum blocks over two weeks. He pointed out that while Ethereum’s block-building system separates the roles of proposers and builders, this specialization has inadvertently led to centralization, which needs to be addressed.
Summary Review: Vitalik Buterin proposed solutions to reduce centralization in Ethereum’s staking and block production. He recommended limiting the amount of Ether users can stake and introduced a two-tier staking model to manage risks. Buterin also highlighted how two entities produced 88% of Ethereum blocks in October, raising concerns about network centralization and security.
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