- Buterin raises concerns about Ethereum’s centralization, with two entities producing 88% of recent blocks.
- Staking centralization could lead to risks such as transaction censorship and reduced network security.
- Proposed solutions include limiting staking amounts and splitting block production roles to mitigate centralization.
Ethereum co-creator Vitalik Buterin recently outlined several strategies to address the growing centralization of block production and staking within the Ethereum network. In a post dated October 20, Buterin highlighted the dangers of staking centralization, where smaller pools are consolidating into larger ones. This trend, he noted, has resulted in just two entities controlling 88% of Ethereum’s block production during the first half of October.
Concerns Over Staking Centralization
Buterin emphasized that the increasing concentration of staking poses one of the most significant risks to Ethereum, potentially leading to issues like transaction censorship. Although the current amount of Ether staked—about 30%—is sufficient to protect against 51% attacks, further centralization could create additional vulnerabilities. For instance, staking could become less profitable, and a liquid staking token might overshadow Ether’s role in the network.
To tackle these issues, Buterin proposed capping the amount of Ether any user can stake. He also suggested limiting staking penalties to 12.5% to prevent over-centralization. Buterin’s recommendations are part of Ethereum’s ongoing technical roadmap, known as the “Scourge” phase.
Block Production and Builder Centralization
The centralization issue extends beyond staking. Buterin pointed to data from Ethereum Foundation researcher Toni Wahrstätter, which revealed that two block builders, Beaverbuild and Titan Builder, constructed nearly 89% of all Ethereum blocks in early October. This centralization is due to Ethereum’s proposer-builder separation method, where builders create blocks, and proposers select the most profitable ones.
Buterin warned that this model could worsen transaction delays and increase the risk of sandwich attacks or other forms of market manipulation. To address these challenges, he introduced several potential solutions, including a “fork-choice-enforced inclusion list” that would allow proposers more control over transaction selection, and a model called “BRAID,” which would divide block production among multiple actors to prevent centralization.
