Chiliz Chief Strategy Officer Max Rabinovitch recently discussed Ethereum co-founder Vitalik Buterin’s efforts to address centralization in Ethereum’s validation structure.

In an interview, Rabinovitch explained that while Buterin’s solutions are suitable for Ethereum (ETH), they may not apply universally to all networks that rely on Ethereum Virtual Machine compatibility.

Buterin’s Approach to Reducing Validator Centralization

Buterin’s proposed approach seeks to reduce validator centralization by lowering entry barriers for participants and capping rewards to prevent validator consolidation.

According to Rabinovitch, this effort targets Ethereum’s unique issues.

“He’s solving an Ethereum problem, not a universal EVM problem,” Rabinovitch said.

The industry expert stressed that each blockchain has distinct needs that may not benefit from Ethereum-specific fixes.

Centralization Concerns

Centralization remains a major concern for Ethereum, with just two validators responsible for nearly 87% of block production. Rabinovitch admitted that such concentration undermines blockchain’s foundational principles.

“With centralization comes an increased risk of compromise via attack and the ability for bad actors to censor the blockchain – both weaknesses which are essentially the antithesis of why blockchain exists to begin with.”

Decentralization or Bust?

Rabinovitch also addressed the widely held “decentralization-or-bust” philosophy in the crypto space, describing it as overly simplistic.

He believes that effective decentralization can be achieved through curated participant requirements, which could bolster network flexibility while maintaining security.

“It is essential to remain diverse enough that no single stakeholder… can easily subvert the governance of a protocol,” he said, suggesting a balance between decentralization and practical governance.

Alternative Measures to Reduce Centralization Risks

To reduce centralization risks, Rabinovitch suggested several alternative measures for Ethereum. These include:

  • Implementing validation rules that limit how often a node can confirm blocks
  • Incorporating operational metrics beyond mere staking requirements, such as uptime and voting consistency

He explained that these steps could create a more equitable validator space and prevent a small number of players from dominating the network.

Governance Optimization: A Gradual Process

Meanwhile, Rabinovitch acknowledged that governance optimization is a gradual, ongoing process for all blockchain protocols, acknowledging that one definite solution might not be ultimately suitable.

“Vitalik is doing Ethereum a service in continuing to be ready to change and innovate the network, as is anyone else working on similar problems. The really fundamental mistake here would be inaction and unwillingness to change despite changing ecosystem conditions.”

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