Vitalik Buterin: Ethereum Founder Addresses Threat of Centralization in Proof-of-Stake System.
TLDR
Vitalik Buterin highlighted the concerns of centralization in Ethereum's proof-of-stake system. The main issues are construction centralization and overcrowding. The proposed solutions are to improve inclusion lists and reward rewards. The goals are to maintain decentralization and security. Using package technology
Ethereum founder Vitalik Buterin recently proposed the network's proof-of-stake (PoS) system and solutions to maintain decentralization and security.
In a series of blog posts, Buterin will address key areas of concern and how Ethereum will continue to evolve.
A primary issue highlighted by Buterin is the centralization of block production. Recent data shows that in October, only two entities, Beaver and Titan, accounted for nearly 90% of Ethereum blocks. This level of focus increases the risk of 51% attacks, marketing censorship and other potential crises.
Buterin explained that larger players can run more sophisticated algorithms for maximum extractable value (MAV), which results in higher revenue per block compared to smaller participants. Over time, this economic advantage will further centralize the network, pushing smaller stakeholders away from block production or into larger aquifers.
Buterin proposed the implementation of “lists of inclusion” to block construction centralization. This approach divides responsibilities between providers (stakeholders) who select transactions and developers who determine the order of transactions. The goal is to level the playing field between large and small stakeholders in the blockchain innovation process.
Another concern is excessive storage capacity. It currently accounts for about 30% of Ethereum's circulation.
Buterin warned that if this percentage grows dramatically, it could lead to further centralization as more token holders migrate to larger, centralized staking providers.
To mitigate the risks of overstocking, Buterin proposed modifying Ethereum's yield curve to reduce earnings when the amount of ETH held in stock exceeds certain thresholds. This helps to prevent concentration of vertical power among large shareholders in a small group.
Buterin also talked about Ethereum's future growth plans, dubbed “The Surge.” The roadmap aims to increase the transaction flow to more than 100,000 TPS (TPS) using data delivery sampling and packet technology. These reforms are designed to improve scalability while maintaining decentralization.
The key to these optimization improvements is to reduce the amount of data each node must process. Buterin calls for closer integration between Layer 1 and Layer 2 networks to create a unified Ethereum ecosystem.
Highlighting these challenges, Buterin emphasized the importance of preventing value extraction from users and limiting network centralization. The Ethereum team is exploring various approaches to address the identified risks, with the ultimate goal of strengthening the network's long-term security and decentralization.
As the Ethereum community digested these ideas, the price of ETH showed resilience. At the time of writing, ETH was trading around $2,700, below a key resistance level on the way to the $2,900 target.
