Ethereum Founder Vitalik Buterin Proposes Tweaks to Improve Decentralization and Reduce Consensus Overhead

Vitalik Buterin, the founder of Ethereum, has recently proposed a series of changes aimed at improving the network's staking model. The primary objectives are to enhance decentralization and reduce the computational burden on the consensus layer. The proposal comes as Ethereum faces challenges related to centralization risks and the sheer number of signatures required for consensus. Buterin's proposal could potentially revolutionize the way staking and consensus are approached on the Ethereum network, making it more accessible and efficient.

In the current Ethereum staking model, there are two types of participants: node operators and delegators. Node operators are responsible for running nodes and providing collateral, usually in the form of ETH. Delegators, on the other hand, contribute some amount of ETH but are not required to participate in any other way. This two-tiered staking model has been popularized by staking pools like Rocket Pool and Lido, which offer liquid staking tokens (LSTs). However, Buterin identifies two main issues with this system. First, there is a centralization risk in the mechanisms for choosing node operators, which are either not very decentralized or have other flaws. Second, the Ethereum Layer 1 verifies approximately 800,000 signatures per epoch, a number that could increase, thereby adding a significant computational load to the network.

To address these issues, Buterin suggests that delegators should have a more meaningful role in the network. He outlines two classes of solutions: delegate selection and consensus participation. In the delegate selection model, delegates could choose which node operators they want to support, thereby having a "weight" in the consensus. This would give them more power and make the network more decentralized. In the consensus participation model, delegators could be given a lighter role in the consensus process, which would act as a check on node operators. This would allow more people to participate in the network's validation process without taking on the full responsibilities and risks of being a node operator.

Buterin also provides concrete implementation ideas for these solutions. One such idea is to allow each validator to specify two staking keys: a persistent staking key (P) and a quick staking key (Q). These keys could be used in various ways to improve the consensus mechanism and reduce the number of required signatures. For example, the protocol could require both the node and a randomly selected delegator to sign off for a message from a node to count.

In conclusion, Buterin's proposal aims to achieve two main objectives. First, it seeks to empower those who do not have the resources or capability to solo-stake to participate meaningfully in the network. Second, it aims to reduce the number of signatures required for consensus to around 10,000, thus aiding decentralization and making it easier for more people to run a validating node. These changes could be implemented at different layers, including within staking pool protocols or as part of the Ethereum protocol itself, offering a flexible approach to improving the network's staking model.