Arguments Erupt Over Staking as Eth2 Draws Closer

Driven by decentralized finance (DeFi) activity, the pace of transactions on Ethereum (ETH) has reached new levels, in recent months. This has thrust the network’s scalability issues back onto center stage. As such, the crypto industry is eagerly awaiting the launch of Ethereum 2.0 (Eth2) after the Medalla testnet, which has ostensibly been making progress. However, amidst the anticipation, there are some dissenting opinions. In a Twitter thread posted on Sept. 23, Chase Wright, an Enterprise Architect with Chicago’s Federal Reserve Bank, laid out the reasons why he won’t immediately participate in staking.

1/ Why I won't be staking ETH at launch, a thread…#Ethereum #eth2

Like many of you, I am excited for ETH2, the Beacon Chain, Phase 0, and everything that will come after.

I have participated in Onyx, Witti, Altona, and Medalla test networks.

I tried Prysm and Lighthouse.

— Chase Wright 🦏 #28 (@mysticryuujin) September 23, 2020

According to Wright, there are a few key reasons. First, he claims that average Medalla validators have yet to profit due to a bug in a client, “we all know that everyone is in the red due to a bug in a single client, but what happens when/if a similar bug happens on mainnet? What’s the response?” He went on to say that none of the teams working on Eth2 have proven their ability to fix such issues, “to date there hasn’t been a single successful fork of an Eth2 beacon chain.” For Wright, this is a red flag and makes The DAO part II a matter of “not if but when.” He continued the rant by noting that there is little interoperability between different clients and nodes and that the whole thing “wreaks of being in a rush to deliver.” There was also voiced concern about node centralization and the voting and staking rewards mechanism. Wright’s thread garnered significant attention. In a reply, lead Ethereum developer Danny Ryan acknowledged the risks of early staking, but went to great lengths to refute many of the points.

I suppose first of all is that I personally don't expect Phase 0 participation to be for everybody.

Staking comes with many risks and staking early in eth2 comes with even more than if you jumped in a couple of years down the line https://t.co/PSOYhj1ulm

— dannyryan (@dannyryan) September 23, 2020

According to Ryan, the forking issue is because “Teku and Lighthouse [clients] could not handle the stressful forking induced by the majority Prysm client. This led to extensive fixes on all clients to be able to handle such stressful scenarios.” He also offered reassurance against the scenario repeating, “if that were to happen again today, each of those three clients is much better suited to resolve forks and build a canonical chain even if 70% of the network goes nuts.” Regardless of any disagreement, anyone with an interest in Ethereum is hoping that by the time Beacon Chain goes live, these early teething problems will have been resolved. Wright, for his part, did ultimately concede that the problems are not necessarily fatal, “I have no doubt these issues/concerns will be worked out eventually. Nothing here is not fixable.”