Ethereum co-founder Vitalik Buterin continues his thoughts on the evolution of the network with a new in-depth blog post. He addresses the challenges of centralization, value extraction and transaction fees, proposing ambitious solutions to sustain the crypto ecosystem.
A holistic approach to Ethereum challenges
Since the beginning of October, Vitalik Buterin has multiplied his publications on X, detailing the crucial issues of the Ethereum network and the solutions envisaged. Today, in an article titled “Possible Futures of the Ethereum Protocol, Part 3: The Scourge” published on his personal blog, he looked at the centralization of block construction and the economic problems associated with staking.
These reflections are part of a broader context of network optimization. Indeed, on October 11, Buterin had already addressed the thorny issue of transaction fees on layers 1 and 2. This issue is all the more pressing as transaction fees have not decreased despite the various upgrade solutions. scale already implemented.
At the same time, the announcement of the next Pectra fork, planned for the end of 2024 or the beginning of 2025, completes this overall vision. This major update aims to optimize transaction fees for layer 2 (L2) scaling solutions, a crucial issue for the scalability and competitiveness of Ethereum.
In this new articleButerin identifies two major challenges: the centralization of block construction and the economic problems linked to staking. He particularly highlights the risks linked to the current MEVBoost system, which could concentrate power in the hands of a few specialized players. Economically, he is concerned about the consequences of a scenario where almost all ETH would be staked.
These thoughts are a continuation of its recent proposals to balance costs between layers 1 and 2 of the network. Buterin seeks to create a cohesive ecosystem, capable of handling increased traffic without compromising its accessibility or decentralization.
Innovative technical solutions
Faced with these challenges, Vitalik Buterin outlines several ambitious technical avenues. For the construction of blocks, it proposes a hybrid approach combining forced inclusion lists (FOCIL) and an auction system. Concerning the economics of staking, he envisages a capping of rewards or the establishment of a two-tier system.
These proposals are a continuation of EIP-7762, mentioned in its previous article, which aims to make “blob” fees more predictable. Buterin also highlights the importance of capturing revenue from maximum value mining (MEV) at the protocol level, an issue closely related to block construction.
At the same time, the co-founder of Ethereum encourages the development of solutions at the application level, such as group staking (squad staking) or decentralized block construction markets. These approaches complement the “fee-based rollups” discussed previously.
In short, Vitalik Buterin's proposals, combined with the Pectra fork, demonstrate a holistic approach to evolving Ethereum. By simultaneously addressing questions of fees, centralization and the economics of staking, the co-founder proposes an ambitious roadmap to meet the challenges of mass adoption of the network. The challenge now is to transform these reflections into concrete solutions and implement them effectively to perpetuate the Ethereum ecosystem and strengthen its position in the crypto landscape.
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