Tech
Vitalik Buterin presents Rainbow Staking
Vitalik Buterin, co-founder of Ethereum, announced the introduction of a new staking concept called “Rainbow Staking”.
This initiative aims to revamp the economic structure of the network by implementing a two-pronged betting mechanism. The approach distinguishes between heavy and light services, offering a framework that affects the distribution of rewards.
Vitalik Buterin presents Ethereum Rainbow staking
Vitalik Buterin explained that Rainbow Staking introduces Minimum Viable Two-Dimensional Emission (2-D MVI). This model aims to optimize the reward allocation between heavy services, which require significant participation support and play a vital role in network operations, and light services, characterized by their flexibility and ability to increase the network’s preference entropy . This is critical for a censorship-resistant network, as it ensures a wide range of transactions and interactions.
Another key goal of Rainbow Staking is to improve the role and value of individual stakers within the Ethereum ecosystem.
Traditionally overshadowed by larger staking pools, individual stakers within Rainbow Staking are recognized for contributing to the resilience of the network. They act as a buffer against potential failures by larger operators. Therefore, it plays a crucial role in maintaining network activity during such downtime.
“With Rainbow Staking, we offer an alternative 2-D MVI in which individual stakers are maximally effective participants on their own terms, achieving the goals many signed up for: competitive economic returns with the ability to realize their preferences in execution chain, for example, as final supports of chain viability or as agents of censorship resistance,” wrote Barnabé Monnot, a researcher at the Ethereum Foundation.
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How Rainbow Staking works. Source: Aether research
Therefore, Buterin proposes to adjust the distribution of rewards to encourage the participation of only stakers and smaller operators to promote a more inclusive economic model. This strategy is designed to shift the competitive model from focusing on a single resource battle to a more diverse and equitable ecosystem.
The announcement of Rainbow Staking has sparked discussions within the cryptocurrency community regarding its potential impact on the market Ethereum network. Proponents argue that incentivizing a wider range of participants could lead to a more resilient and decentralized network.
Critics, however, raise questions about implementation challenges and potential unintended consequences. In particular, regarding the network safety and the dynamics between solo and pooled staking.
“The biggest disadvantage I see in your proposal is that it is complex, difficult to migrate, [and] difficult to predict second-order effects. The first two points may have no alternative but to define a clear specification. Regarding the last point, I would urge further research in areas such as tokenized claims, retaking, etc.”, Matt Stam, founding engineer of Succinct, She said.
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While the full implications of this new staking model remain to be seen, they reflect Ethereum’s efforts to explore innovative solutions that support its growth and sustainability.
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