In a recent blog post, Vitalik Buterin, co-founder of leading altcoin Ethereum, outlined a comprehensive vision for integrating various protocols directly into the Ethereum source code. Buterin’s recommendations covered a number of concepts such as ERC-4337, ZK-EVM, Mempool Private, and Liquid Staking. While these ideas have the potential to reshape the Ethereum landscape, Buterin emphasized the importance of careful evaluation, acknowledging that many protocols will evolve over time. Here are the details…
Buterin called two altcoins ‘risky’
Buterin’s primary focus is on what he calls “Enshring,” which involves integrating these protocols directly into the Ethereum source code. This approach aims to streamline the Ethereum ecosystem by embedding these protocols at the core of Ethereum. However, Buterin also acknowledged that there are various considerations and that many protocols will change as they mature.
Should Ethereum be okay with enshrining more things in the protocol?https://t.co/7F7yOLBoUr
— vitalik.eth (@VitalikButerin) September 30, 2023
A key concern raised by Buterin relates to the centralization of service providers within the Liquid Staking ecosystem. Currently, the Lido Finance protocol controls a significant 32% of the total ETH staked on the network. Buterin emphasized that Lido and Rocket Pool, the two leading Liquid Staking protocols, carry different risks. cryptokoin.com As we reported, Lido is behind the LDO altcoin project. Rocket Pool is the project behind the RPL altcoin.
Liquid staking must become decentralized
Rather than relying solely on ethical and moral arguments, Buterin proposed technical changes to decentralize the Liquid Staking market. These solutions include redesigning Rocket Pool’s approach and potentially assigning certain management rights to a randomly selected group of stakers. The Ethereum community has been eagerly awaiting Buterin’s opinions and suggestions, given his important role in shaping the Ethereum network. His vision for integrating these protocols directly into the Ethereum source code was critical.
In his blog post, Buterin also explored the complex balances between integrating certain features into the Ethereum protocol and leaving them to other layers of the ecosystem. He talked about various protocols, including account abstraction protocol ERC-4337, ZK-EVMs, private mempools, code precompilations, and liquid staking. While Buterin expressed a strong preference for some protocols, such as ERC-4337, to be directly incorporated into Ethereum’s code, he acknowledged that each feature has a complex cost-benefit balance that will continue to evolve over time.
There is concentration in liquid staking providers
A significant portion of Buterin’s blog post revolved around the concept of liquid staking. Currently, Lido, a liquid staking pool, controls over 32% of staked Ethereum. Although this rate is spread across different validators, Buterin expressed concerns about the concentration of Ethereum’s liquid staking providers. Rather than relying solely on moral suasion to encourage a more diverse group of staking providers, Buterin suggested that changes to Ethereum’s protocol could further decentralize liquid staking. This could include changing the methods of liquid staking provider RocketPool or granting additional governance powers to a randomly selected board of smaller staking providers.
These are complex issues that Buterin believes will continue to evolve over time. Buterin’s suggestions sparked discussions within the Ethereum community about the future direction of the protocol and how to strike a balance between innovation, decentralization, and security. Ethereum enthusiasts are eagerly awaiting new developments. Meanwhile, Buterin’s vision for Ethereum’s evolution remains at the forefront of the cryptocurrency world.
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