Vitalik Buterin calls for caution in risks of re-staking in Ethereum

Vitalik Buterin 2


IMPORTANT POINTS:

  • Vitalik Buterin expressed concerns about overcomplicating Ethereum’s consensus mechanism and expanding the responsibilities of validators.
  • Buterin noted the risk of re-staking, especially when validators face sanctions on external chains, which could compromise network security.
  • He also mentioned concerns about an “ultimate oracle” that could increase risks and complexity if tied to Ethereum staking.

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Ethereum co-founder Vitalik Buterin expressed concern about overcomplicating Ethereum’s consensus mechanism beyond its original design, specifically in terms of re-staking.

Buterin expressed doubts about initiatives that could introduce unnecessary risks into the ecosystem and complicate the roles of Ethereum validators beyond their primary duty of verifying core protocol rules. Buterin is concerned about “re-staking”, a mechanism developed by Eigen Layer that extends the responsibilities of Ethereum validators to include external chain security

“We should proceed with caution when application layer projects seek to extend the ‘scope’ of consensus beyond validation of the essential rules of the Ethereum protocol.”

In Ethereum’s proof-of-stake model, validators are selected based on how much ether they own and are willing to stake. The network has the largest set of validators of any Proof-of-Stake chain, both in terms of the number of validator entities and the total value of ether staked, amounting to about 18 million ETH ($34 billion). This has led to the development of systems to take advantage of this network security and protect third-party chains. However, Buterin advocated a cautious approach.

The risk of “re-staking”

Buterin noted that while re-staking can be used for low-risk purposes, there are situations where it could compromise mainnet security, such as when Ethereum validators face penalties on third-party chains. Penalties are crackdowns on validators who engage in undesirable activities, such as improperly maintaining your stake or improperly processing transactions.

“We should preserve the minimalism of the chain and support the use of “re-staking” that does not seem like a slippery path towards expanding the role of the Ethereum consensus.”

Buterin’s comments drew responses from Sreeram Kannan, co-founder of Eigen Layer. Kannan agrees with Buterin’s analysis, acknowledging that Eigen Layer should avoid building complex financial primitives with the help of “re-staking” as they “can get out of hand”. However, he stated that re-staking can be used in “low-risk” scenarios.

Kannan agreed that Eigen Layer can extend the functionality of validators beyond Ethereum, but said they should be developed without slashing, which would introduce unnecessary complexity. Furthermore, he emphasized that Eigen Layer is careful not to affect the security of Ethereum in any way.

Buterin also raised concerns about a proposal by Gnosis founder Martin Köppelmann for an “ultimate oracle”, another application that exceeds the core design rules of Ethereum’s core protocol. In the context of smart contracts, oracles are vital as they supply data off-chain. However, Buterin noted that if the security of these data feeds were tied to Ethereum staking, it could increase the risks and contribute to further complexity.

Buterin suggested that such roles or “responsibilities” added to the Ethereum consensus mechanism could magnify the challenges and risks involved in running a validator. He emphasized:

“Validators must put in significant human effort in terms of monitoring, running, and updating additional software to ensure their adherence to newly implemented protocols.”