Ethereum (ETH) is approaching the mainnet release of the proof of stake version, but DeFi enthusiasts are asking if ETH2 staking can be protected from whale dominance.
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- High rates for fat cats
- Here’s how Cardano (ADA) addressed these issues:
Many Ethereum (ETH) enthusiasts are concerned about the potential for centralization of the ETH2 staking process. Therefore, they are discussing measures to prevent the “Oligarch” from dominating.
High rates for fat cats
The pseudonym Ethereum (ETH) enthusiast Superphiz.eth, an activist in the Ethereum Beacon chain community, is his concern About centralization of ETH2 network in the future.
Who will be the first staking provider to publicly promise to limit more than 22% of validators on the chain from operating? Who wants to step up to the plate and prioritize the health of the beacon chain over profit?
That is, he is the first pool to limit which pool’s betting “power” (the share of controlled verifiers participating in the signing of Ethereum (ETH) transactions), for example 22 percent of the total number of verifiers. I’m guessing if it will be.
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This decision could reduce the profits of this “pioneer”, but it would significantly contribute to the overall health of the network by reducing the likelihood of a 51% attack.
Vitalik Buterin, the founder of Ethereum, has proposed an “economic” motive for this limitation. It seems reasonable for him to raise the price of staking pool participants who manage more than 15% of the network.
Speculative and controversial take: Price cuts by top stake pool providers need to be justified. Similarly, if your stake pool is above 15%, you must accept and even * expect * to continue increasing the commission rate until the pool falls below 15%. https://t.co/cOtuM7Occd
— Vitalik.eth (@VitalikButerin) May 14, 2022
If the “share” of this pool or that pool falls below 15%, the price will be reduced to the “normal” level again.
Here’s how Cardano (ADA) addressed these issues:
Note that Ethereum (ETH) has also been criticized for “centralization” in the Proof of Work (PoW) version. The main mining pool controls most of the hash rate.
As previously mentioned in U.Today, the Cardano (ADA) community faced similar problems after the start of ADA staking. Step by step, I / O Global (IOG) has introduced some restrictions to reduce the profitability of staking through large pools.
By adjusting the so-called k parameter in 2021, small and medium-sized pools were able to surpass the top 10 staking whales in ADA bet share.
