Vitalik Buterin is exploring a fresh approach to decentralize Ethereum staking

Crypto News– Ethereum co-founder Vitalik Buterin recently put forth a method aimed at enhancing Ethereum’s decentralization by penalizing correlated failures among validators.

Buterin shared his ideas on March 27 about bolstering decentralized staking through additional anti-correlation incentives on the Ethereum Research forum.

Vitalik Buterin is exploring a fresh approach to decentralize Ethereum staking

He proposed that if multiple validators controlled by the same entity fail simultaneously, they would face a more severe penalty compared to if they failed independently.

Buterin noticed that validators grouped together, like in a staking pool, are prone to experiencing correlated failures, likely due to shared infrastructure.

The theory is that if you are a single large actor, any mistakes that you make would be more likely to be replicated across all identities that you control.

Vitalik Buterin

The suggestion entails penalizing validators based on their deviation from the average failure rate. If numerous validators fail during a certain period, the penalty for each failure would be higher.

Are validators in the same cluster (eg same exchange, same user) more likely than unrelated validators to miss attestations at the same time? If so, can we tweak rewards to favor decentralized staking?

Possibly yes.https://t.co/TPPg2gAC1j

— vitalik.eth (@VitalikButerin) March 27, 2024

According to simulations, this approach could mitigate the advantage of larger Ethereum stakers over smaller ones, as larger entities are more likely to cause spikes in the failure rate due to correlated failures.

Potential advantages of the proposal include encouraging decentralization by requiring each validator to have separate infrastructure and making solo staking more economically competitive compared to staking pools.

Buterin also proposed alternative options, such as different penalty schemes to reduce the advantage of large validators over smaller ones, and examining the effects on geographic and client decentralization.

He did not mention the possibility of lowering the minimum staking amount from 32 Ether, which currently equals approximately $111,500.