Ethereum staking related risk report: Worries deepen after Pectra upgrade in 2025

Liquid Collective, a decentralized liquidity staking protocol on Ethereum, and Obol Network, a decentralized validator technology (DVT) protocol, jointly launched a report on the risks related to Ethereum staking on the 6th. The report includes concerns about client, operator and cloud diversity, as well as potential risks posed by the 2025 Pectra upgrade.

According to Cointelegraph, Matt Leisinger, chief product officer of Alluvial, Liquid Collective’s software development company, said in an interview: Our latest report with Obol highlights the increasing importance of addressing the risks and protocol-level penalties related to Ethereum staking. Increase.

Customer and Operator Risk

The report alleged that problems with clients and operators could put Ethereum at risk, and named executive-level customers with 84% of the market share. Client:

• Major bugs in mainstream clients may result in "severe penalties" and "network instability"

• Staking as Ethereum Consensus An important part of the mechanism, staking through a single large node operator may expose staked assets to the risk of downtime and penalties

• 84% of the network is using popular clients such as Geth, Nethermind and others end, an error in which could cause significant disruption.

Therefore, the report reminds that operator diversity is critical to maintaining network health and avoiding single points of failure.

Customer Diversity Website

In addition, Leisinger also stated to the media: Every stakeholder and service provider must strictly evaluate the relevance, Diversity and risk mitigation to protect against potential risks, even from trusted node operators. ”

Clients refer to software running on the blockchain network. These clients are responsible for implementing the rules of the blockchain protocol, processing transactions, and participating in consensus mechanisms, such as Geth and Nethermind. Operators are Refers to the person or organization responsible for running these client software. They ensure that the node software is running in the appropriate hardware and network environment, and are responsible for maintaining the normal operation of the node, including software updates, error troubleshooting, and resource management. Cloud and Geographic Diversity Issues

The report also analyzes the geographical distribution of validators and cloud providers, and believes that too concentrated distribution can easily lead to related outage risks. At the same time, the report cites recent service outages. Hetzner and AWS are examples.

In addition, the report proposes that decentralized validator technology (DVT) can effectively improve cloud and geographical diversity, both for multi-operator staking configurations and as a single operator. Failover technology. And geographical diversity also helps avoid outage issues caused by natural disasters or wars

## Geographic map of Ethereum validators that support the proof-of-stake consensus mechanism.

Pectra Upgrade

On the other hand, the Ethereum “Pectra upgrade” expected to be carried out at the end of the first quarter of 2025 will introduce EIP-7251 (maxeb, increasing the maximum validity of the verifier. Balances held between 32 and 2,048 ETH incentivize staking operators to merge validators into one super validator).

However, the report warns that increasing the maximum effective stake for a single validator to 2,048 ETH will result in a reduction in the total number of validators on Ethereum, thereby reducing the number of P2P messages and BLS signatures that need to be aggregated per epoch. quantity. This means that having fewer validators could increase the risk of a single point of failure and impact the decentralized nature of the network: with each validator now able to have a higher effective balance, professional node operators are expected to consolidate the number of nodes they operate. The number of validator nodes to reduce costs and simplify operations, resulting in a reduction in the total number of validators on Ethereum. This will reduce the number of redundant validators (operated by the same entity) and thus the number of P2P messages and BLS signatures that need to be aggregated per epoch.

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