Vitalik Buterin Proposes a New Two-Tier Staking Mechanism for Ethereum

Vitalik Buterin Proposes a New Two-Tier Staking Mechanism for Ethereum
Source: Bitcoin IRA

Vitalik Buterin proposed an innovative proposal aimed at refining the Ethereum staking mechanism. He pinpoints decentralization issues surrounding the selection process for node operators across various staking pools and identifies inefficiencies in the current Layer 1 consensus mechanism.

Buterin suggests a two-tiered staking mechanism. The first tier is a high-complexity slashable tier with frequent activity but limited participants (around 10,000), and the second tier is a low-complexity one where members engage sporadically and face minimal or no slashing risk.

This new model would involve the modification of the validator balance cap and implementing a balance threshold to categorize into these tiers.

Buterin's new proposal aims to tackle the centralization issue of Ethereum by empowering those lacking resources for solo staking, giving them meaningful participation avenues, and reducing the transaction processing load on Ethereum's consensus layer, making it easier for all to run a validating node.

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