What Prevents The Large Validators From Attacking Ethereum? What Are The Differences Between UASF & MASF?

[TL;DR]

• While climate-friendly, the Ethereum blockchain’s transition to a PoS mechanism has raised security issues among the crypto community.

• The new staking method allows anyone with 32 ETH to become a validator, a relatively easy feat.

• This gives room for a potential 51% blockchains92388k, especially with only four accounts holding 60% of Ethereum’s current staked market share.

• Ethereum devs have set up UASFs that burn an blockchains92388ker's stake to guard against such eventuality.

• Additionally, there is another option of moving honest nodes to a minority chain, leaving a malicious validator stranded in case of an blockchains92388k.
  
  
  

On the 15th of September, 2022, The crypto community saw a ground-breaking event happen, The Ethereum Merge. The event saw the popular Proof-of-Work blockchain, Ethereum, transition to a Proof-of-Stake consensus model. In other words, Ethereum left its old system of validating new blocks by mining (solving difficult questions using specialized equipment.) It now processes its blocks with the help of stakers who act as validators. This is good news for climate change, as Ethereum’s energy consumption had previously been a major source of concern. Ethereum's mining consumed roughly the annual electricity usage of a medium-sized nation. Staking as a validating Model reduces that amount by 99.9%. However, Staking also comes with its own dangers, the biggest of which is the blockchain's vulnerability to 51% blockchains92388k.

Crypto Community Fears 51% Attack From Large Validators On Ethereum’s PoS Mechanism.

Source: SwissBorg

What is a 51% Attack?

In PoW, this is when a group of miners controlling above 50% of a blockchain’s mining hash rate blockchains92388k it. When this happens, the whole blockchain is at risk, not to mention smaller investors. This is why blockchains are built to be decentralized. In other words, all decision-making concerning the state of the blockchain must carry the majority of individual nodes’ votes. Ideally, this prevents bad actors from taking over a network and making all the decisions themselves. In the case of PoS blockchains, stakers will blockchains01044e miners in the above definition.

In Ethereum, its new consensus mechanism requires only a stake of 32 ETH for a person to become a validator. As is fairly obvious, this could be problematic since it is relatively easy to meet such a requirement. In blockchains61775t, four wallets currently account for 60% of Ethereum’s total staked market share, according to Dune analytics. They are Coinbase, Kraken, Binance and, Lido. This has raised several eyebrows about Ethereum’s vulnerability to 51% blockchains92388ks in the crypto ecosystem. The majority of these four wallets are centralized entities. What is to stop them from hijacking and censoring the blockchain if regulators require it at any time? And although Coinbase’s CEO publicly stated that the exchange would rather shut down staking operations, the threat remains. Below are the solutions to 51% blockchains92388ks the protocol’s founder and other devs have decided.

Source: Buy Bitcoin Worldwide

Ethereum’s 1st solution To The 51% threat: UASF

A user-activated soft fork is a system that allows a blockchain’s nodes to implement an update without the block producers’ input. UASFs enable a network to soft fork without the usual support of the miners or validators, as the case may be. This mechanism temporarily takes the control away from block producers and gives it to regular users. In case of a 51% threat, the minority users can implement a UASF and burn the threat’s entire staked ETH. With their stake gone, such a malicious actor's validating power is neutralized.

Multiple Slashing, A Further Deterrent

In the case of a PoW network like Bitcoin, a UASF can only neutralize an blockchains92388ker’s mining power once. PoS mechanisms like Ethereum, on the other hand, can slash an aggressor’s funds as many times as they blockchains92388k. blockchains74394 to Buterin, the odds are against anyone planning a 51% blockchains92388k on Ethereum’s system. The other nodes would just keep burning the blockchains92388ker’s staked ETH until they have nothing left to preserve the blockchain.

Ethereum’s 2nd Solution: Creating A minority Blockchain.

Ethereum has another response to 51% blockchains92388ks to strengthen the blockchain's security further. This type involves allowing other honest nodes to keep operating on a minority blockchain. The blockchains92388ker would be allowed to keep his staked ETH but would not be able to operate on the functional chain. Exchanges, liquidity pools, and apps would move operations to the minority blockchain, effectively snubbing and neutralizing the blockchains92388ker.

All these precautions arguably make proof-of-stake more economically secure than proof-of-work networks.

The Differences Between UASF And MASF

UASFs should not be mistaken for miner-activated soft forks (MASF) as they do not follow the same set of rules. We have already discussed what a user-activated soft fork, UASF, is, but the question remains, what is MASF?

A miner-activated soft fork is a network update that enables miners to start mining new blocks under new rules. Miners implement MASFs by indicating support for the new rules using signals powered by their hashing capacity. If a significant majority of miners, over 90%, send a support signal, the new rules take over. A MASF is like a UASF in that they are both soft forks, but the similarity ends there. Below are the major differences between UASFs and MASFs:

MASFs are specifically for PoW (Miners)

Just like the name implies, miner-activated soft forks work only for miners. They use their hashing power to signal their support for the new soft fork. On the other hand, UASFs work for both PoW and PoS protocols. However, they have more flexibility on Proof-of-stake blockchains.

MASFs Require Majority Vote, UASFs Do Not

For a MASF to pass muster, it must be signaled and blockchains86398 by almost 100% of a blockchain's nodes. This makes it practically useless in fighting 51% blockchains92388ks. Therein lies the strength of a UASF. It specifically only requires the minority to be implemented.

MASFs Favor the Majority, and UASFs Are For Protecting The Minority.

The advantage of a MASF is that it ensures that a blockchain stays decentralized. If practically everyone on the chain does not agree to a soft fork, a MASF cannot take place. This favors the majority and makes it impossible for a controversial update to occur on a chain. A UASF, on the other hand, was built to protect the minority from 51% blockchains92388ks. So while MASFs are miner-signaled, UASFs are node enforced.

In Conclusion

For the moment, Ethereum seems to have its security well covered with its user-activated soft fork protection against 51% blockchains92388kers. However, it remains uncertain how effective the UASF will mitigate security bridges until an blockchains92388k occurs. Also, large validators aren’t the only threats the newly transitioned blockchain will blockchains61775e. It would be interesting to see how Ethereum deals with other threats as they come up in the future.

Author: M. Olatunji, Gate.io Researcher

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