Vitalik Buterin Proposes Major Ethereum Upgrade to Reduce Staking Centralization

Ethereum co-founder Vitalik Buterin has published a new proposal aimed at addressing growing concerns about staking centralization on the network. The proposal, titled “Anti-Correlation Penalties and Decentralized Staking Incentives,” introduces mechanisms to discourage large staking pools from dominating block production.

The plan includes two key components: enhanced penalties for correlated failures among large validators, and positive incentives for solo stakers and small pools. Under the proposal, if multiple validators controlled by the same entity fail simultaneously, they would face exponentially higher penalties than uncorrelated failures.

Lido Finance, which currently controls approximately 32% of all staked ETH, has expressed openness to the proposal. “We support any initiative that strengthens Ethereum’s decentralization while maintaining network security,” said a Lido DAO contributor.