Vitalik Buterin voices concerns over DAOs approving stake pool operators

Vitalik Buterin, co-founder of Ethereum, has expressed worries regarding decentralized autonomous organizations (DAOs) exerting a monopoly implicit the enactment of node operators successful liquidity staking pools.

In a September 30 blog post, Buterin issues a informing that arsenic liquid staking pools follow the DAO attack for governance implicit node operators—who are yet liable for the pool's funds—it tin exposure them to imaginable risks from malicious actors.

“With the DAO approach, if a azygous specified staking token dominates, that leads to a single, perchance attackable governance gadget controlling a precise ample information of each Ethereum validators.”

Buterin highlights staking protocol Lido (LDO) arsenic an illustration with a DAO that whitelists node operators. Nevertheless, helium underscores that, adjacent though it has enactment safeguards successful spot to mitigate the hazard of monopolization.

“To the recognition of protocols similar Lido, they person implemented safeguards against this, but 1 furniture of defence whitethorn not beryllium enough,” helium noted.

ETH staked by class chart. Source: Vitalik Buterin

In the meantime, helium explains that Rocket Pool offers the accidental for anyone to go a node relation by placing an 8 Ether (ETH) deposit, which, astatine the clip of this publication, translates to astir $13,406.

However, helium notes this comes with its ain risks. "The Rocket Pool attack allows attackers to 51% onslaught the network, and unit users to wage astir of the costs," helium stated.

Related: Ethereum is astir to get crushed by liquid staking tokens

Buterin highlights that a imaginable attack to code this contented involves promoting and encouraging ecosystem participants to utilize a assortment of liquid staking providers. He clarifies this would alteration the likelihood of immoderate 1 supplier becoming excessively ample and posing a systemic risk.

“In the longer term, however, this is an unstable equilibrium, and determination is peril successful relying excessively overmuch connected moralistic unit to lick problems.”

Magazine: Are DAOs overhyped and unworkable? Lessons from the beforehand lines