Ethereum co-founder Vitalik Buterin has proposed solutions to address concerns over staking centralization and block production. In an Oct. 20 blog post, Buterin highlighted that smaller staking pools are merging with larger ones, causing two entities to dominate 88% of Ethereum blocks in early October.
He warned that this centralization poses significant risks, such as transaction censorship. While 30% of Ethereum’s Ether is already staked, Buterin emphasized that staking could become less profitable if more Ether is staked, creating additional risks.
To address these concerns, Buterin suggested capping the amount of Ether one can stake and limiting penalties to 12.5% of staked funds. He also introduced a two-tier staking model, where some staking is “risk-bearing” and others are “risk-free.”
Buterin also proposed solutions like “fork-choice-enforced inclusion lists” and “BRAID,” both aimed at reducing centralization in block production. These solutions would help Ethereum maintain its decentralization while minimizing the risk of transaction manipulation.