Ethereum’s PoS Beacon Chain has been live for almost 10 months with over 7.8 million ETH staked and over 243,000 validators live across the globe. While the chain has had a few small hiccups over the last 10 months, it has mostly chugged along in a non-eventful manner which is exactly what we want to see! In today’s piece, I wanted to focus on a few of the topics capturing the Ethereum communities attention in the eth2/consensus layer space.

Lido @LidoFinance

There's now more than 7,800,000 ETH being staked - more than 6.6% of all circulating ETH. At current prices that's $22,255,000,000+ committed to the security of Ethereum through staking. $ETH 🏝️📈

September 29th 2021

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There’s been a lot of chatter around client diversity recently because many in the community feel that the Prysm client still has too great of a share of the network (sitting at around 64%). This means that the other 3 core clients - Nimbus, Teku and Lighthouse, make up the other 36% of the network (with Lighthouse in second place at 21.9%). The main reason we’d like to see more client diversity is that if a single client has more than 2/3 of the network (66%+) and there is a consensus-related bug in that client, it could lead to a fork of the beacon chain and, because of how Ethereum’s PoS works, that forked chain would finalize and be considered the “canonical” one by the network. This means that social coordination would be the only way to revert back to a network pre-bug and this would cause a lot of disruption for the entire ecosystem. So, in order to avoid this, the Ethereum ecosystem needs to come together and encourage people to run minority clients - but let’s not be toxic about it - it’s not PryLabs’ fault that they are the majority (they just have a really good client and onboarding experience for stakers).

There’s also now many initiatives popping up within the community to tackle the issue of client diversity. Michael Sproul was able to collect a bunch of really good data about client diversity here, ChainSafe has created a website for monitoring nodes/clients here, and Prysmatic Labs (the creators of the Prysm client) published a blog post on how they view client diversity. On top of this, the /r/ethstaker community has been quite active in spreading awareness about this issue and encouraging people to focus more on client diversity and general network health. Oh and if you want to learn about why both Ethereum network’s are built as a multi-client architecture in the first place, you can read this post here.

Another thing that’s been capturing the communities attention is around the distribution of stake as we obviously don’t want all of the staked ETH being concentrated in a handful of centralized entities. As it currently stands, the largest single staker is Lido with 11.85% of the total stake - though it’s important to note that Lido distributes the stake among different staking service providers. Coming in at a close second is Kraken with 11.66% of the stake and then Binance slots in third place with 3.85%. Though what is really nice to see is that over 60% of the stake has not been identified as belonging to a staking service provider or centralized exchange (though obviously we only have approximations for this) - if you want to dive deeper, you can find the metrics here. Also, on the topic of stake distribution, I’ve actually argued before why I don’t think centralized exchange staking is a critical threat to Ethereum’s proof of stake - you can read that here.

Of course, a piece about eth2 wouldn’t be complete without talking about ‘The Merge’ - that is, the merger of the eth1 and eth2 networks. Though before I jump into that, I do want to note that the “eth1” and “eth2” nomenclature has actually recently been dropped from the Etherean vocabulary in favor of “consensus layer” and “execution layer”. Basically put, the consensus layer is the PoS Beacon Chain and the execution layer is the current chain we all use (minus proof of work). Alright so most of us probably know that the merge has no concrete date for when it’s going to happen (at best there have been windows given such as Q1/Q2 of 2022) but it is something that pretty much every core Ethereum researcher and engineer is now working on in some capacity. It’s important to understand that the merge is an enormous effort and will be Ethereum’s largest upgrade in its entire history so it’s near-impossible to give an accurate launch date at this point in time. In saying that, there are a lot of initiatives happening in October around the merge so we should have more updates on all of it over the next few weeks!

As you can see, there are a lot of things happening in the consensus layer ecosystem even though we’re still in a pre-merge world. It’s kind of wild to think that Ethereum currently exists as two separate networks and they each have their own issues to deal with. Of course, I can’t wait until the day that these two networks are merged together because then the entire Ethereum ecosystem will be able to focus solely on just a single network!

Have a great day everyone,
Anthony Sassano

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