In a recent blog post, Vitalik Buterin expressed his opinions on three key issues regarding the decentralization of Ethereum: MEV, liquid staking, and node hardware requirements.
Buterin explained that many of the concerns related to the centralization of Ethereum can be addressed through smart protocol designs and updates, some of which are already being implemented.
Let’s see below all the details.
Summary
Decentralization of Ethereum: Vitalik Buterin’s response
As anticipated, Vitalik Buterin, co-founder of Ethereum, responded to the criticisms directed at the blockchain in a detailed blog post, analyzing three fundamental issues for the centralization of Ethereum.
MEV (Miner Extractable Value), liquid staking and hardware costs for managing a single node are the three key points.
Buterin has observed that concerns about the design of Ethereum in these three key areas are “widely shared” and added:
“These are concerns I have personally had on many occasions.”
However, according to Buterin, these problems might not be as difficult to overcome as some argue.
In his post, published on May 17th, Buterin first addresses the issue of MEV, which is the financial gain that sophisticated node operators can obtain by reordering transactions within a block.
Buterin distinguishes two approaches to MEV: “minimization” (reducing MEV through the design of intelligent protocols, like CowSwap) and “quarantine” (attempting to reduce or eliminate MEV altogether through in-protocol techniques).
Although the MEV quarantine may seem like an appealing option, Buterin notes that this perspective carries some risks of centralization:
“If builders have the power to completely exclude transactions from a block, attacks can easily arise-”
However, Buterin has supported builders working on MEV quarantine through concepts like transaction inclusion lists, which “take away the builder’s ability to completely exclude transactions from a block.”
“I think that the ideas in this direction – really pushing the quarantine box to be as small as possible – are really interesting, and I am in favor of going in that direction.”
Buterin: reducing barriers for solo stakers, a crucial step
Vitalik Buterin has addressed the issue of the low number of solo stakers on Ethereum.
In particular explaining that many prefer to use centralized staking providers like Coinbase or decentralized solutions like Lido and RocketPool.
This choice is due to the complexity, hardware requirements, and the minimum of 32 ETH needed to run an Ethereum node independently.
While acknowledging the progress made in reducing the costs and complexity of managing a single node, Buterin emphasized that “there is still more that we could do.”
Suggesting the possibility of reducing the time required to withdraw ETH in staking or lowering the minimum requirement of 32 ETH to become a solo staker, as stated:
“Incorrect answers could lead Ethereum down a path of centralization and ‘recreation of the traditional financial system with additional steps’; correct answers could create a shining example of a successful ecosystem with a wide and diversified set of individual stakers and highly decentralized staking pools.”
High hardware requirements for nodes: the civil debate
Regarding the high hardware requirements for nodes, Buterin admitted that the issue is more complex.
However, he acknowledged that with the implementation of Verkle Trees and the upcoming EIP-4444, “the hardware requirements of a node could plausibly eventually decrease to less than one hundred gigabytes, and perhaps almost to zero if we completely eliminate the responsibility of storing the history (perhaps only for non-staking nodes).”
Buterin concluded his post urging the Ethereum ecosystem to confront difficult questions rather than avoid them:
“… We should have a deep respect for the properties that make Ethereum unique and continue to work to maintain and improve those properties as Ethereum grows.”
In a post on X, Buterin added that he is happy to see a civil debate among community members:
“I am really proud of the fact that Ethereum does not have a culture that tries to prevent people from expressing their opinions, even when they have very negative feelings towards important things in the protocol or ecosystem. Some wave the ideal of ‘open discourse’ as a flag, others take it seriously.”
