Vitalik wrote on 10/14 that since the launch of Ethereum, it has undergone many important transformations, one of the most notable of which is "The Merge". This event marks the long-awaited transition of Ethereum from the Proof-of-Work (PoW) consensus mechanism to the Proof-of-Stake (PoS) system. As of October 2024, Ethereum has been operating as a PoS system for two years, demonstrating excellent results in terms of stability, performance, and resistance to decentralization. However, despite the success of this transformation, there are still many areas that need further improvement. The report will explore the future possibilities of Ethereum's PoS design, focusing on technical improvements and potential development paths.
Table of Contents
ToggleThe Merge: A Milestone in Ethereum's Evolution
What is "The Merge"?
Vitalik explains that "The Merge" initially referred to Ethereum's critical transition from PoW to PoS, which also opened a new chapter for the network. Ethereum's PoS system has since demonstrated stability and efficiency, but challenges remain. The current focus is on improving certain technical aspects of PoS, such as accelerating block finality, lowering the barrier to entry for validators, and increasing system efficiency.
Challenges Remaining After "The Merge"
Although the PoS transition was successful, Ethereum still faces some challenges. These include the long time required for block finality and the relatively high 32 ETH threshold for validators, which limits broader participation. Efforts are underway to address these issues while maintaining Ethereum's core principles, such as economic finality.
Single-Slot Finality and the Democratization of Staking
What is the Problem with Finality?
One of the key areas that Ethereum developers are exploring is reducing the time required for block finality. Currently, it takes around 15 minutes to achieve finality across multiple epochs. The high 32 ETH validator requirement is also a significant barrier, hindering greater participation. The goal is to reduce the finality time to a single block slot and lower the validator entry threshold to 1 ETH.
(Note: In Ethereum, an epoch represents a time range in which validator activity occurs, with each epoch containing 32 slots. Each slot lasts 12 seconds, meaning that each epoch is approximately 6.4 minutes long.)
The Dilemma
Vitalik explains that these goals - shortening finality time and reducing staking requirements - are difficult to achieve simultaneously. To ensure economic finality (i.e., making the cost of block rollbacks prohibitively high), each validator must sign the block, which can make the process more time-consuming. While networks like Algorand use committee-based finality, a hasty application of this approach on Ethereum could make it more vulnerable to 51% attacks.
Exploring Potential Solutions
Solution 1: Brute Force
One approach is to address this challenge through improvements in signature aggregation protocols. Technologies such as zero-knowledge proofs (ZK-SNARKs) can help more efficiently process signatures from millions of validators, allowing Ethereum to increase speed while maintaining decentralization.
Solution 2: Orbit Committees
Orbit Committees provide another solution by distributing finality responsibility to smaller, randomly selected groups of validators. This can reduce the burden on node operators while maintaining a high level of economic finality, which is crucial for Ethereum's security. The Orbit Committees work by selecting a medium-sized committee from a larger pool of validators, reducing the attack risk while preserving efficiency.
Solution 3: Two-Tier Staking System
A two-tier staking system would introduce different levels of validators, with higher-tier stakers playing a more critical role in finality. This approach can reduce the overall burden on validators while still allowing smaller validators to participate, but it also carries potential centralization risks.
Single-Slot Finality: The Most Promising Proposal?
How Single-Slot Finality Works
Single-slot finality will allow blocks to be finalized within a single slot (12 seconds or less), significantly improving the user experience. It will simplify Ethereum's protocol by reducing the likelihood of blockchain rollbacks and accelerating transaction confirmations, benefiting both the network and users. Achieving this will require modifications to the consensus mechanism, but it could give Ethereum a competitive edge against other performance-focused blockchains.
The Leading Proposals
Several proposals have emerged to implement single-slot finality, such as the "Horn" protocol, which focuses on improving signature aggregation, and "Orbit SSF," which seeks to balance validator efficiency and economic finality. These proposals aim to maintain Ethereum's decentralization while making the system faster and more inclusive.
Addressing Decentralization Concerns
Lowering the Validator Entry Threshold
One of the critical goals is to reduce the 32 ETH minimum staking requirement. By allowing users to stake as little as 1 ETH, Ethereum can achieve greater participation democratization and increase the number of solo stakers. This measure can further decentralize the network, as it will enable more individuals to run their own validators, rather than relying on large staking pools.
However, lowering the entry barrier and accelerating finality can increase the node burden, potentially pushing out smaller validators. Therefore, finding the right balance between inclusivity and efficiency is crucial for the future success of Ethereum's PoS.
Ethereum's Future: Beyond the Merge
Single Secret Leader Election (SSLE)
Another area of research is the Single Secret Leader Election (SSLE), which aims to address the vulnerability of revealing the identity of the next block proposer in advance. This information could be exploited by attackers to launch Denial of Service (DoS) attacks against validators. SSLE increases security by hiding the proposer's identity before the block is produced.
Faster Transaction Confirmations
There is also research on shortening Ethereum's slot time, which could reduce transaction confirmation times from 12 seconds to 4 seconds. Shorter confirmation times will enhance the user experience, especially for DeFi applications and Rollups, making Ethereum more efficient and decentralized.
Vitalik believes that the transition to PoS is a critical milestone for Ethereum, but the journey is far from over. As developers continue to refine the protocol, the focus will remain on making the system more secure, efficient, and accessible to a broader user base. Through innovations like single-slot finality, Orbit Committees, and SSLE, Ethereum is progressing towards maintaining its position as the leading blockchain network while addressing challenges of decentralization, performance, and security.
