In a groundbreaking move towards bolstering the decentralization and fairness of the Ethereum network, Vitalik Buterin, co-founder of Ethereum, has unveiled a new proposal aimed at refining the protocol’s staking process.
The initiative, dubbed the “anti-correlation incentive” program, seeks to address common errors made by validators, such as failing to complete essential attestations crucial for the network’s security and efficiency.
Buterin’s proposal arises from a key observation within decentralized systems: errors made by one participant often propagate across other nodes or validators controlled by the same entity.
The core principle of the anti-correlation incentive is to discourage such synchronized errors, thereby promoting a more distributed and resilient network architecture.
Central to Buterin’s argument is the recognition that without such measures, efforts to promote decentralization may inadvertently foster only superficial compliance. Validators might superficially diversify without genuinely distributing control or resources, thus perpetuating centralization under the guise of decentralization.
While Ethereum already employs penalty mechanisms, known as slashing, for severe infractions, these have typically been reserved for egregious or malicious behavior. The proposed anti-correlation incentive program, however, seeks to integrate penalties into the routine operations of the network.
This approach specifically targets large stakers who operate numerous validators from a single location or device, potentially leading to widespread, correlated failures within the network.
Buterin suggests that the program would compel these large entities to genuinely diversify their operations, reducing the risk of simultaneous failures while still allowing them to benefit from economies of scale. The aim is to strike a balance between the advantages of large validators and the imperative for a decentralized and resilient network.
To ensure fairness, the proposal primarily impacts large validators, with safeguards in place to mitigate undue hardship on smaller participants. This ensures that punitive measures are directed where they can drive meaningful change without disproportionately affecting participants with fewer resources.
Speaking at ETHTaipei 2024, Buterin also discussed the concept of “rainbow staking,” which advocates for diversity in service providers to address Ethereum’s centralization concerns.
His apprehension regarding centralization was underscored by the dominance of platforms like Lido Finance, which, at one point, controlled over 70% of Ethereum-staked assets despite their distribution among numerous validators.
