Ethereum’s chief spokesman expressed concern about “stretching” the blockchain consensus. Specifically, he talked about the re-staking mechanism and its risks.
- Buterin warns about how over-stretching Ethereum’s consensus could be dangerous.
- Ethereum’s founder showed concerns about re-staking to secure other protocols.
- While not denying such a mechanism, he advocated in favor of a minimalist approach.
Vitalik Buterin on Ethereum’s Consensus Overload. Ethereum co-founder and chief spokesperson for the project, Vitalik Buterin, has shared concerns about over-complicating Ethereum’s blockchain consensus mechanism beyond its original design. In a lengthy blog post, Buterin expressed doubts about initiatives that could introduce unnecessary risks into the ecosystem and complicate the roles of Ethereum’s validators beyond their primary duty of verifying the core protocol’s rules. He mentioned re-staking and cited many examples to demonstrate his argument.
What is re-staking?
The term staking refers to the process of token locking by validators of a Proof-of-Stake (PoS) Blockchain. These entities earn rewards in exchange for staking tokens to help guarantee the network and process transactions. In this sense, re-staking refers to a process allowing users to stake native ETH tokens on both Ethereum and other protocols, securing all of these networks simultaneously.
This mechanism, developed by Eigen Layer, extends the responsibilities of validators to include securing external networks by leveraging the existing trust and security in the Ethereum ecosystem. Ethereum currently has the biggest set of validators among all PoS chains, both in terms of the number of validating entities and the total value of tokens staked, some 18 million ETH (~ $34 billion). This considerable size has spurred the development of systems to leverage this network security to secure third-party chains. However, Buterin advocated a cautious approach.
Buterin suggests a cautious approach
While the co-founder is not per se opposed to this mechanism for reusing staked ETH, he warned that overloading Ethereum’s consensus could be dangerous. Distinguishing between levels of risk, Buterin noted that while there are scenarios where re-staking can be used for low-risk purposes, there are also situations where they could compromise the security of the core network, such as when validators face “slashing” on third-party chains.
“Slashing” refers to a punitive measure against Ethereum validators for engaging in undesirable activities, such as incorrect transaction processing. The result can include the forced expulsion of a validator from the network and the associated loss of their staked ETH. “We should be wary of application layer projects that take steps that risk increasing the ‘scope’ of blockchain consensus to anything other than verifying the rules of Ethereum’s core protocol,” Buterin wrote while reflecting on the “fragility” of the social consensus of Blockchain communities.
Making a Case for Minimalism
High-risk scenarios could involve plans to force the Ethereum community to perform hard forks (radical updates to the protocol) to solve problems for specific projects. Buterin warned against such instances, arguing that they could put too much pressure on the network’s security system, causing internal divisions in the community and damaging the very heart of the project. The developer advocated instead for simplicity:
Instead, we should preserve the minimalism of the blockchain and support uses of re-stake that don’t seem like slippery slopes toward extending Ethereum’s consensus role and help developers find alternative strategies to achieve their security goals.Vitalik Buterin
Buterin presented several possible solutions, depending on the scenario, including decentralized oracles not entirely crypto-economic or oracles based on validator votes that explicitly commit that their emergency recovery strategies are something more than appealing to the Layer 1 (i.e., Ethereum) consensus.
The publication prompted a response from Sreeram Kannan, co-founder of Eigen Layer, who agreed with the analysis and acknowledged that the re-staking mechanism should avoid building complex financial primitives with the help of re-staking, as “they can get out of control,”. However, Kannan emphasized that Eigen Layer is cautious about not affecting Ethereum’s security, aligning with Buterin’s blog post.