Vitalik Buterin has explored several potential improvements that could make Ethereum more cost-effective to support and overall faster in speed.
It turns out that, despite years of technical tinkering and debates, Vitalik Buterin is not satisfied with the first reform of Ethereum's consensus mechanism.
In a blog post on Monday, the Ethereum co-founder pondered several potential enhancements to Ethereum's proof-of-stake model. These include lowering the financial barrier for individual stakers and shortening the time required to finalize Ethereum blocks.
Two years ago, the "Merge" fundamentally changed the way Ethereum transactions are validated. Ethereum no longer relies on an energy-consuming computer network to ensure network security but has transitioned to a system where validators dedicate assets to the network.
Validators are rewarded by assembling transaction blocks and proving the accuracy of other transactions. To participate in this process, validators lock up 32 ETH ($84,000), effectively as skin in the game. However, Buterin believes the threshold could be significantly lowered to 1 ETH ($2,600).
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"Survey after survey has repeatedly shown that the main factor preventing more people from staking alone is the minimum limit of 32 ETH," he wrote. "Lowering the minimum limit to 1 ETH would solve this problem to the point where other issues become the main factors limiting individual staking."
Recently, the speed at which new validators protect the Ethereum network has slowed. According to data from beaconchai.in, since surpassing 1 million active validators in April, about 73,000 validators have joined. Over the past month, this number has approached 3,000.
Reducing Ethereum's staking requirements for validators can also address some centralization issues within the network. According to the Dune dashboard, currently, the leading liquidity staking ETH decentralization platform, Lido Finance, accounts for 28% of all staked Ethereum.
The second part of Buterin's proposed improvements focuses primarily on transaction finality. The term refers to Ethereum transactions included in blocks that cannot be changed.
Buterin wrote that, as of now, Ethereum transactions take about 15 minutes to complete. This is because Ethereum's progress is measured in epochs that occur every 6.4 minutes. Each epoch consists of 32 slots, typically producing a new block every 12 seconds.As Blocknative's Chief Technology Officer and co-founder Chris Meisl explained, after two eras have passed, it becomes economically infeasible for attackers to revert Ethereum blocks. At that point, "you can consider it very secure," he wrote in a blog post last year.
Buterin wrote that "single-slot finality" would reduce the finality time to once every 12 seconds. He wrote that, combined with lower staking requirements, it would "align Ethereum's properties with (more centralized) performance-focused [layer-1] chains."
However, Buterin acknowledged that there are several ways to make single-slot finality work, ranging from powerful options involving advanced cryptography to a two-tiered system for stakers.
Buterin's blog post was published against the backdrop of increasing debate surrounding layer-2 networks. While Ethereum's Dencan upgrade in March provided them with a new method to offer users lower transaction costs, it also led to a period of inflation in Ethereum's circulating supply.
Meanwhile, Ethereum's core developers are preparing for the network's next major upgrade, Pectra. The first part of the upgrade also adjusts the way Ethereum stakers receive rewards and is expected to be released sometime early next year.