Vitalik Buterin Unveils New “Rainbow Staking” Framework For Ethereum – Here’s How It Works
Ethereum co-founder Vitalik Buterin unveiled a new “rainbow staking” framework on Wednesday that may help decentralize protocol control from the network’s largest players.
Speaking at the ETHTaipei 2024 event on Wednesday, the renowned developer highlighted the overconcentration of ETH’s staked supply with centralized providers, including government-regulated exchanges like Coinbase and Binance.
Such staking providers haven’t colluded for anything nefarious so far, but the long-term risk of those entities doing so remains, according to Vitalik.
“We have become very dependent on ‘social pressure + virtue’,” said the co-founder, according to a translated report from Chinese outlet ABMedia Crypto.
“To what extent is this inevitable?” he asked. “If it is inevitable, we should be clearer about whether we rely on incentives or social pressure + virtue, rather than excessively rely on the latter.”
Vitalik continued to discuss the centralization risk of ETH staking on ETH Taipei, emphasizing that LIDO COINBASE BINANCE and others have an excessive share, and introduced the idea about "rainbow staking", a conceptual framework allowing protocol service providers, whether… pic.twitter.com/rfFlcxNzyc
— Wu Blockchain (@WuBlockchain) March 21, 2024
While solo staking without third-party providers is possible on ETH, it requires a minimum of 32 ETH to get involved.
The minimum was originally established to avoid overwhelming the blockchain with tiny stakers, and hopefully avoid excessive ETH requirements.
However, with that minimum now worth $112,000, the economic and technical barrier to entry has generated a swath of “lazy ETH holders” who delegate the task to massive third parties.
These groups also provide “liquid staking” – a service that
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