Ethereum 
$2,647Vitalik Buterin, co-founder of , discussed the possible risks of the Proof-of-Stake (PoS) mechanism and solutions to these risks. Buterin evaluated the effects of PoS on the decentralization and security of the Ethereum network.
Risk of Centralization
Buterin noted that economies of scale allow large stakers to outperform smaller ones. This may lead to small stakers leaving the process and joining larger staking pools. This increases the risk of a 51% attack on the network and transaction delays.
Role of Network Participants
It was stated that Ethereum’s major participants can use complex algorithms to optimize block creation. In this way, they may have the opportunity to earn more income. Additionally, participants with more capital can take on the risk of locking up capital by offering liquid staking tokens (LST) and transfer this risk to smaller participants.
Overstaking Problem
Buterin emphasized that currently approximately 30% of the total ETH is staked, and if this rate increases further, Ethereum may become more centralized. This may cause ETH holders to use their tokens through centralized providers.
He noted that mechanisms such as “committee inclusion lists” should be used to prevent centralization in Ethereum’s block creation process. In this way, small stakers can have the opportunity to create blocks at the same level as big players.
To prevent overstaking, he suggested changing Ethereum’s supply curve so that rates of return decrease when the amount of ETH staked exceeds a certain level. This will prevent any particular group from having a large amount of staked ETH. It also supports deflation in an environment where income weakens as network operating income increases.
Buterin shared targets for a capacity of more than 100,000 transactions per second using data availability sampling and rollup technology to increase Ethereum’s scalability. With these developments, it is aimed for the Ethereum ecosystem to work in a unified manner by ensuring tighter integration between participants.
Future Plans
Saying that more work needs to be done to solve Ethereum’s centralization and security problems, Buterin believes that these risks pose serious threats in the long term.
In summary, eliminating risks in Ethereum’s PoS system is critical to the long-term success of the network. Proposed solutions to avoid centralization and increase security can support the sustainable growth of Ethereum.
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that crypto currencies carry high volatility and therefore risk, and should carry out their transactions in line with their own research.
