There are concerns about centralization within the Ethereum (ETH) community. Some say on foot Strikers even the risk of losing ETH if one insect takes place in the network. Worse, the entire network could come to a virtual standstill.
Ethereum goes on the attack: can it overtake Bitcoin in 2024?
Ethereum news
Centralization in the Ethereum network
More precisely, this is what it's about Execution customerLayer that is important for processing and executing transactions on the Ethereum network. The big problem now is that there is so much validators, These are the ones who hold ETH and help process transactions, choosing a customer. Geth, as the customer is called, has a whopping 78.8% market share.
This means that 78.8% of validators could go offline if an error is detected in Geth. In addition, the Ethereum network would become extremely slow, says Lachlan Feeney, CEO of Ethereum infrastructure builder Labrys. Combined with the fact that Geth clients would go offline, this poses a huge risk to ETH, which is locked to staking via the Geth client:
“An inactivity leak (the penalty a validator receives when they go offline) only takes two days to lose 0.6% of their stake, or the equivalent of two months of staking rewards! (…) 10% of the stake or three years of reward would be lost within a week of going offline. 50% of the share would be lost in about 20 days and 90% in about 40 days.”
What should Ethereum stakers do?
To make the Ethereum network more secure and robust, there needs to be more diversity among customers. Feeney said stakers should transfer their ETH to other customers to resolve the issue. And this happens little by little.
While Geth's share is now at 78.8%, it was 84% a few days ago. In short: more and more strikers are recognizing the problem, even though the problem is far from being solved. Only with a market share of 33% would the situation be better under control.
This only applies if you stake your ETH directly on the Ethereum network, and therefore does not apply to investors staking through exchanges like Bitvavo.
Questions about this news? Join our vibrant Discord community with over 9,000 members for free! Here you can easily discuss the latest crypto trends and expectations
Post views: 68