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In his latest talk at ETHTaipei, Ethereum founder Vitalik Buterin introduces Rainbow Staking as a way to combat growing centralization concerns around staking.

Buterin notes that staking in general and liquid staked tokens today have become centralization risks on the Ethereum blockchain.

He highlights that there are not enough solo stakers on Ethereum today, citing technical challenges like running your own node and financial restraints like not having more than 32 ETH.

This is because, on Ethereum, solo stakers must deposit 32 ETH (~$ $113,233) to join the network as validators. Many individuals who wish to stake their ETH do so by delegating their tokens to liquid staking solutions.

One of the most popular liquid-staked solutions today is Lido, which currently has a 61.36% dominance over the market today.

Read more: Did Lido fly too close to the sun? Inside the centralization debate

Buterin remarked that a proposed solution to these centralization concerns around staking is Rainbow Staking.

The idea here is that you explicitly split up into two kinds of staking, and you call it heavy staking and light staking, Buterin said.

In this particular case, heavy staking is slashable and signs in every slot. On the contrary, light staking, which is not slashable, is pulled up to sign slots through a lottery system.

You basically try to explicitly separate out those two and potentially require both heavy stakers and light stakers to sign off on a block in order for the block to get finalized, he said. So you try to add the security of both of those approaches together.

Read more: The biggest Ethereum upgrade ever goes live

The framework of Rainbow Staking is ultimately hoping to counter the emergence of one dominant liquid staked token that could replace ETH as the main currency on the Ethereum network. It is also designed to offer competitive participation by bolstering the economic value of being a solo staker.

Buterin notes that more research and development is still required before Rainbow Staking becomes a viable design for staking on Ethereum in the long term.

To me, the biggest questions here are not even technical; theyre philosophical, Buterin said, noting that it is important to understand the intended answer behind ways to enable lazy ETH holders who want rewards to participate in securing the Ethereum network.

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Originally posted here:

Vitalik Buterin talks 'Rainbow Staking' at ETHTaipei to combat centralization risks - Blockworks