Will The Merge weaken Ethereum?


All is not rosy for The Merge – The network Ethereum will transition from Proof of Work to Proof of Stake in the coming days. Obviously, these two modes of consensus each have their advantages and disadvantages. Recent research has identified some weaknesses in Proof of Stake that will need to be mitigated in the future.

The Merge: Ethereum about to abandon Proof of Work

Since its launch in 2015, the consensus of the Ethereum network has been provided by the Proof of Work. However, the developers have aimed from the beginning to perform one day a transition to the Proof of Stake.

This day should arrive on September 15th. This date will mark the definitive abandonment of the Proof of Work in favor of the Proof of Stake. This transition will happen through an update called The Merge.

In practice, The Merge aims to hook up the consensus layer in Proof of Stake at the execution layer of Ethereum.

Roadmap of The Merge on Ethereum.

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The problem of consecutive blocks in Proof of Stake

Obviously, the imminence of the event has revived the debate between the two most widespread consensus systems in the ecosystem.

Thus, the researcher Alvaro Revuelta published a paper in which he describes a problem inherent in Proof of Stake.

To fully understand this, it is necessary to return to some differences between Proof of Work and Proof of Stake. In Proof of Work, a block is validated by the first miner to have calculated the solution of the block. In the case of Proof of Stake, the validator in charge of validating the next block is randomly selected from all the validators.

However, there is a non-zero probability that a validator that is selected twice in a row to produce a block. Obviously, this probability is a function of the share that the validator represents on the network.

Thus, a validator pool that has 50% of the staked ETH has 99.9% chance to propose two blocks in a row.

In practice, a pool such as Coinbasewhich currently holds 13% of validators, would have about a 30-40% chance of producing two blocks in a row.

Probability of producing 2 to 5 blocks in a row depending on the market shares held by a validator.
Probability of producing 2 to 5 blocks in a row depending on the market shares held by a validator.

The risks of consecutive production

As pointed out by our colleagues at Coin Telegraph, this probability generates security issues.

Indeed, in Proof of Stake, the validator in charge of the next block is notified upstream by the protocol.

Let’s take the example of Coinbase again. Due to the Proof of Stake used on Ethereum, the validator will be notified before producing the next block. With its 13% market share, the pool knows that it will have on average 30 to 40% chance to validate two blocks in a row.

Therefore, Coinbase could attempt to conduct an attack on two blocks. A situation explained by an anonymous developer interviewed by our colleagues.

“If you control two consecutive blocks, you can start an attack on block N and end it on block N+1. And this, without any arbitrage bot coming to fix the price you have manipulated between the two. »

Although unlikely, this situation should not be taken lightly. Thus, Ethereum developers have already planned to develop the protocol to correct this potential attack vector.

At the same time, the transition to Proof of Stake will generate a fratricidal war on Ethereum. Indeed, many miners have come together to create a ethereum forking which would keep the Proof of Work. A potential boon for Ethereum users who will get the tokens from the fork.

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