May 22, 2023

Summary - Unmasking Ethereum Consesus's Overload by Vitalik

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In a recent article posted  by Vitalik Buterin, the co-founder of Ethereum, addressed the issue of overloading Ethereum's consensus with additional functionalities and responsibilities. Buterin argued that while the Ethereum network's consensus is highly secure, attempts to recruit Ethereum's social consensus for other purposes can pose significant risks to the ecosystem. He emphasized the importance of distinguishing between reusing validators, which he considered low-risk, and overloading social consensus, which he deemed high-risk.

Exploring the Dual-Use of Ethereum Consensus

The article presented several examples to illustrate this distinction. Low-risk scenarios included creating a web3 social network that grants "verified" status to Ethereum validators, or proving control over Ethereum validators' keys to satisfy legal requirements. 

On the other hand, high-risk examples involved attempting to utilize Ethereum's social consensus for different purposes, such as forking Ethereum to recover a bug in a layer-2 (L2) project or relying on Ethereum's community to perform a hard fork to delete validators that collude to censor transactions on another chain.

Stretching Ethereum Consensus

Buterin highlighted the potential dangers of stretching Ethereum consensus by incorporating real-world price indices or other external factors into the blockchain's core. He warned that this could expose Ethereum to the conflicts and political disputes of the outside world, leading to community divisions and even chain splits. The article presented a hypothetical scenario where an ETH/USD price oracle faced a critical political event, resulting in a split within the Ethereum community and the emergence of two separate chains.

Expansion Beyond Ethereum's Primary Purpose

Risks associated with expanding Ethereum's consensus beyond its primary purpose were also discussed. It explained that adding additional duties to Ethereum's consensus would increase the costs, complexities, and risks for validators. It could also lead to externalizing dispute resolution needs onto the Ethereum community, forcing validators and the community to make numerous decisions that could potentially cause community splits. Furthermore, it would strengthen the too-big-to-fail dynamics, favoring larger projects for potential bailouts in case of issues or failures.

Addressing Risks

Buterin acknowledged the need for better oracles and solutions to address risks and improve Ethereum's functionalities. He suggested case-by-case solutions for different problems, such as employing not-quite-crypto economic decentralized oracles for price feeds or establishing decentralized court systems for subjective facts. For layer-2 protocols, he proposed relying on partial training wheels, multiple proving systems, and eventually enshrining complex functionalities in the Ethereum protocol itself. Additionally, he advised minimizing reliance on cross-chain bridges and considering moving toward becoming a validium anchored into Ethereum for enhanced security.

In conclusion 

Buterin urged caution in extending Ethereum's consensus beyond its core purpose of verifying the Ethereum protocol rules. He emphasized the fragility of blockchain communities' social consensus and the potential risks of pushing the boundaries of blockchain's scope. He called for preserving the minimalism of the blockchain, supporting re-staking approaches that don't extend the role of Ethereum consensus, and assisting developers in finding alternative strategies to achieve their security goals.

It is important to note that the article was written by Vitalik Buterin, co-founder of Ethereum, and was posted on Twitter on May 21, 2023.