Vitalik has released a new article on the future development of the Ethereum protocol (part 3: The Scourge) titled "Possible futures of the Ethereum protocol, part 3: The Scourge". Vitalik believes that one of the biggest risks facing Ethereum L1 is the centralization of proof-of-stake due to economic pressure. If there are economies of scale in participating in the core proof-of-stake mechanism, this will naturally lead to large stake holders dominating and small stake holders exiting to join larger pools. This will increase the risk of 51% attacks, transaction censorship, and other crises. In addition to the centralization risk, there is also a risk of value extraction: a small group of people are getting value that would have gone to Ethereum users.

Key objectives to address risks:

Minimize the centralization risk of the Ethereum staking layer (especially in block construction and capital provision, i.e. MEV and staking pools);

Minimize the risk of excessive value extraction from users;