The end of Ethereum approaching? Vitalik Buterin raises alarm

In a recent article, Vitalik Buterin warns against the excessive use of Ethereum’s consensus. While Ethereum is considered one of the most secure crypto protocols, its misuse can lead to systemic risks. Buterin explains why certain techniques, such as using Ethereum validators for other protocols, should be discouraged and combated.

Ethereum’s consensus at risk

Securing Ethereum relies on 18 million ETH (~$34 billion). The network nodes validate a block every 6.4 minutes, running various protocol implementations to ensure redundancy.

Furthermore, in case of consensus failure, developers and users work towards network recovery. If a validator attempts to attack the network, they face a penalty in the form of confiscation of their staked tokens.

However, over the years, ideas have emerged to use Ethereum’s consensus for other purposes. Layer 1 is often used for oracle creation. Consequently, the network faces overloads that, according to Vitalik Buterin, jeopardize its project.

Vitalik Buterin emphasizes that the excessive use of Layer 1 can lead to unforeseen consequences.

He provides an example of an ETH/USD price oracle gradually expanding its scope to include other price indices such as ETH/EUR and ETH/CNY.

In this scenario, where numerous oracles would be proposed by Ethereum validators, Buterin explains how an unexpected political crisis in Brazil could compromise the integrity of the Ethereum blockchain.

In this regard, Buterin warns against incorporating increasing amounts of real-world information into Ethereum’s consensus. He highlights that this could transform the blockchain into a financial tool explicitly tied to conflicts and political decisions, contrary to its initial goal as a neutral technological platform.

Buterin’s proposed solutions

According to Buterin, solutions to these problems should be considered on a case-by-case basis. For price oracles, he suggests using decentralized oracles that do not rely on Layer 1. He also praises the efficiency of protocols based on validators’ voting.

Additionally, Ethereum’s co-founder supports the creation of a decentralized court system based on a DAO to resolve disputes regarding more subjective information than prices.

Regarding Layer 2 solutions, Buterin recommends adopting a more cautious approach. He suggests not solely relying on Ethereum’s consensus to solve the issues of these faulty protocols. According to him, specific security and recovery mechanisms need to be designed for each Layer 1. That would minimize systemic risks for Ethereum.

Understanding the risks associated with Ethereum’s consensus overload is essential. This is often caused by applications external to the main blockchain. Vitalik Buterin‘s warnings shed light on the need to preserve the security and integrity of the Ethereum network while exploring specific and tailored solutions to meet the needs of different applications.