Ethereum’s next big upgrade is due in early 2025. Called Pectra, it is a combination of the Prague and Electra upgrades effected in tandem. As core developers and the community gear up for it, a report released by Obol and Liquid Collective highlights concerns with staking on the blockchain network.
It emphasizes the relationship between the node client or software, node operators, and cloud options. As stakers trust nodes with their assets, any issues in the operations of any of these components can lead to the slashing of staked assets.
For instance, node operators relying on the same centralized cloud operators can lead to scenarios where all the nodes can get slashed if the cloud platforms experience outages. Such was the case not too long ago with service providers like AWS and Hetzner.
The report noted that stakers and service providers on Ethereum must assess risks at all levels to ensure slashing aroused by such situations can be minimized. It stated, “Operator diversity is crucial for maintaining network health and avoiding single points of failure.”
Ethereum slashes issues caused by correlated risks tremendously, so adopting measures to reduce such risks is the best for nodes. That includes increased usage of the distributed validator technology (DVT), which ensures consensus is maintained even when up to 33% of the nodes on the Ethereum network go offline. If nodes utilize DVT in unison, it prevents slashing even when a significant chunk of nodes go offline for reasons like cloud platform outages.
Doing so is needed now more than ever as Ethereum moves toward its Pectra upgrade. According to the report, “the Pectra upgrade will allow staking providers to consolidate their stake into fewer validators by raising the maximum effective balance to 2,048 ETH.” DVT will help the network remain secure and functional even when a few nodes go offline, which is needed as Ethereum consolidates stakes among a smaller group of validators.
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