In a blog mail Released on October 14, Ethereum co-founder Vitalik Buterin outlined potential future improvements to the Ethereum protocol, focusing on technical improvements to its Proof of Stake (PoS) system. Titled “Potential Futures for the Ethereum Protocol, Part 1: Merging,” the publication delves into strategies for improving stability, performance, and accessibility while addressing the risks of centralization.
First, Buterin reflects on Ethereum’s successful transition from proof-of-work to proof-of-stake also known as “consolidation” nearly two years ago, noting that “this proof-of-stake has performed remarkably well in stability, performance, and avoiding centralization risks.” However, he emphasized “There are still some important areas where Proof of Stake needs to be improved.”
Future improvements of Ethereum
One of the main focuses of this post is achieving single-slot finality and reducing minimum staking requirements to democratize network staking. Currently, it takes 2 to 3 periods (about 15 minutes) to finish a block, and it takes at least 32 ETH to become a validator. Buterin highlights the conflict between reducing staking requirements, reducing final time, and reducing node overhead.
“Today, it takes 2 to 3 epochs (about 15 minutes) to finalize a block, and it takes 32 ETH to be a holder,” he wrote. He set goals of finishing blocks in a single slot and allowing validators to stake no more than 1 ETH. “Poll after poll repeatedly shows that the main factor preventing more people from solo staking is the 32 ETH minimum,” Buterin points out.
To address these challenges, several methods are discussed. One involves implementing better signature aggregation protocols, perhaps using zero-knowledge proofs (ZK-SNARKs), to process signatures from millions of validators per slot. Another approach is to introduce Orbiter Committees, a mechanism where a randomly selected medium-sized committee finalizes the chain while maintaining its attack cost characteristics. “Orbit takes advantage of the pre-existing heterogeneity in validator deposit sizes to gain as much economic accuracy as possible, while still giving small validators a proportional role,” he explains.
Buterin is also considering creating a two-tier quota system with different deposit requirements, where only the top deposit tier would be directly involved in providing the economic end. He acknowledges that “the risks depend greatly on the specific rights that the bottom tier of mortgages receive,” and that some designs can lead to centralization.
By addressing vulnerabilities related to denial of service (DoS) attacks on known validators, Buterin proposes implementing Single Secret Leader Election (SSLE) protocols. “The best way to fix a DoS problem is to hide information about which validator will produce the next block, at least until the moment the block is actually produced,” he says.
SSLE protocols use cryptographic techniques to create “blind” validator IDs, ensuring that only the owner of the encrypted ID can create a valid proof to propose a block without others knowing their identity. However, Buterin acknowledges the challenges: “We very much appreciate that Ethereum is a reasonably simple protocol, and we don’t want the complexity to increase further. The SSLE implementations we’ve seen add hundreds of lines of specification code, introducing new assumptions into complex cryptography.
He also explored ways to reduce the Ethereum transaction confirmation time from the current 12 seconds to 4 seconds, emphasizing the value of reducing confirmation times to improve user experience and aid decentralized Layer 2 solutions. Strategies include reducing period times and allowing bidders to spread out advance confirmations over time periods. However, Buterin warns of the risks of potential centralization and the need for appropriate incentives, noting that “if we add a separation mechanism between the validator and the proposer, the execution blocks will not need SSLE, because we can rely on block generation specialists.”
Buterin also touches on additional important areas, including the 51% attack recovery. He points out that although complete automation is impossible, “we can achieve partial automation (…) to ensure that the bad guys in any attack are at least not able to achieve a quick and clean victory.” He is also considering increasing the quorum threshold for ending a bloc from 67% to 80% to enhance security, arguing that “this seems a healthier position than the ‘wrong side’ getting an immediate victory.”
Concluding his blog post, Buterin warns of the importance of preparing for the potential threat of quantum computers capable of breaking existing encryption systems: “This justifies the conservatism in assumptions about the performance of proof-of-stake designs, and is also a cause for concern.” More proactive to develop quantum-resistant alternatives.
At press time, Ethereum was trading at $2,524.
Featured image from Bloomberg, chart from TradingView.com