Ethereum’s Vitalik Buterin Explains How to Prevent Whales from Dominating ETH2 Staking

Vitalik Buterin, the co-founder of Ethereum (ETH), has a few days ago aired his opinion on how to prevent whales from dominating in staking.

Many Ethereum (ETH) community members have been showcasing concerns regarding the possible centralization of the Ethereum 2.0 (Consensus Layer) staking process. This brought about the discussion on viable ways to avoid whales’ domination.

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Solution to Possible Centralization in Upcoming ETH2 Network

Superphiz.eth, a pseudonymous Ethereum enthusiast and activist of the Beacon chain community, took to Twitter on the 13th of May 2022 to share his concerns about the possible centralization in the much-anticipated Consensus Layer (ETH2) network.

In the tweet, he was wondering which pool will be first to limit its own staking power, so as not to operate more than 22% of the total number of validators on the blockchain.

Potentially, this is expected to cut the profits of the pioneers, but it would greatly boost the security of the network by reducing the likelihood of a 51% attack.

Superphiz.eth tweeted, “I wonder, who will be the first staking provider to publicly commit to limiting themselves to not operating more than 22% of validators on the chain? Who do you want to see step up to the plate and prioritize beacon chain health above profits?”

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In response to Superphiz.eth’s concern, Ethereum co-founder, Vitalik Buterin, proposed economical motivation for this limit. He said it’s reasonable to increase fees for the participants of staking pools that are controlling over 15% of the network.

According to his suggestion, once the share of the affected pool is back below 15%, the fees can return to normal levels.

Vitalik Buterin responded, “Speculative controversial take: we should legitimize price gouging by top stake pool providers. Like, if a stake pool controls > 15%, it should be accepted and even *expected* for the pool to keep increasing its fee rate until it goes back below 15%.”

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