Ethereum founder Vitalik proposes major changes to the network

Author: André Beganski Translation: Plain-spoken Blockchain

It turns out that Vitalik Buterin is not completely satisfied with the first major overhaul of the Consensus Mechanism in ETH, despite years of technical polishing and discussion.

In Monday’s blog post, the co-founder of Ethereum proposed several potential improvements to the Ethereum Proof of Stake model, including lowering the funding threshold for personal stakers and shortening the block confirmation time for Ethereum.

Two years ago, the ‘merge’ event completely changed the way ETH transactions are validated. ETH no longer relies on a computer network that consumes a lot of energy to ensure its security, but instead shifts to a system where validators stake assets into the network.

Validators earn rewards by packaging transactions into blocks and verifying the accuracy of other blocks. 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 lowered to 1 ETH (about $2,600).

“Polls repeatedly show that the main factor preventing more people from independent stake is the minimum threshold of 32 ETH,” he wrote. “Lowering this threshold to 1 ETH will solve this problem, and other issues will become the main factors limiting independent stake.”

The speed of validators’ rise on the Ethereum network has recently slowed down. According to data from beaconchai.in, since the active validators exceeded 1 million in April, about 73,000 validators have joined. However, in the past month, this number has increased by less than 3,000.

The drop requirements for stake validators in the ETH network can also alleviate some concerns about network centralization. Currently, the leading Decentralization Ether flow stake platform, Lido Finance, accounts for 28% of all stake in the ETH network, according to data from the Dune dashboard.

The second part of Buterin’s proposed improvement focuses mainly on the finality of transactions. This term refers to ETH transactions that are included in a Block and cannot be changed once confirmed.

Buterin wrote that, as of now, ETH transactions take about 15 minutes to be finally confirmed. This is because the progress of ETH is measured in ‘epochs’, with each epoch occurring approximately every 6.4 minutes. Each epoch consists of 32 ‘slots’, typically generating a new Block every 12 seconds.

Blocknative’s Chief Technology Officer and co-founder Chris Meisl explained that, from a cost perspective, it is almost impossible for attackers to RollbackETH block after two epochs. At this point, you can consider it “extremely secure,” he wrote in a blog post last year.

Buterin also mentioned that ‘single slot confirmation’ will shorten the final confirmation time to every 12 seconds. Combined with the stake requirements of drop, this will make ‘ETH Block’s properties consistent with those (more centralized) performance-oriented Layer1 Blockchains’.

However, Buterin also acknowledged that there are various implementation methods for making ‘single slot confirmation’ effective, including using advanced cryptography intensive methods or designing a double-layer system for stakers.

At the time of Buterin’s blog post, the discussion around Layer2 networks was intensifying. Although Ethereum’s Dencun upgrade introduced a new way to help users drop transaction costs in March this year, it also led to an inflation period in the circulating supply of Ether.

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 receive rewards.