A recent survey by Galaxy Digital researcher Christine Kim has revealed major misconceptions within the ethereum community regarding the economic security of blockchain. The survey, which asked the crypto community to evaluate the security threshold of eth staked to protect the blockchain, indicated a lack of awareness about the real risks of an attack.
The respondents to the twitter.com/christine_dkim/status/1778530640381854183″ target=”_blank” rel=”noopener nofollow”>survey showed the following beliefs about the security of ethereum:
- 44.9% believed that securing ethereum requires 100% of all eth staked, which amounts to $110 billion, 31.4 million eth.
- 20.4% thought that 66.6% of eth staked was enough, equivalent to $73.4 billion, 20.9 million eth.
- 34.7% considered that only 33.3% of the staked eth, or $36.7 billion, 10.4 million eth, was necessary for security.
How vulnerable is ethereum?
Addressing these misconceptions, Christine Kim emphasized the real vulnerabilities of ethereum's proof-of-stake (PoS) mechanism in a detailed follow-up to x. Kim highlighted: “You don't need 100% staked eth to attack ethereum. 33% is enough to alter the purpose, 50% to prolong a division of the chain and 66% to double the expense..”
He added: “Security depends primarily on the network's ability to penalize participants by burning large amounts of the value they have locked up. The worse the attack, the more value stakeholders stand to lose. “It’s important to understand what’s really at stake here (pun totally intended).”
Further elaboration of the ethereum Foundation explains the technical underpinnings of these vulnerabilities. An article from the foundation, to which Kim refers, states: “Attackers who use >= 33% of the total participation making all the attacks mentioned above more likely to succeed… 33% of staked ether is a benchmark for an attacker because with anything greater than this amount they have the ability to prevent the chain from ending without having to control accurately the actions of the other validators.”
For attacks involving 34% of the total participation, the article details a possible “dual purpose” scenario where an attacker can manipulate the validation of two conflicting blockchain forks simultaneously. This form of attack is characterized by significant coordination and control over the synchronization of messages within the network, which represents a high risk due to the possible reduction of the total amount staked by the attacker.
Higher levels of controlled betting, such as 50% and 66%, increase the potential for more serious disruptions, including sustained chain splits and censorship or rollback of transactions. The foundation's article explains: “With >50% of the total stake, the attacker could dominate the fork election algorithm… allowing the attacker to censor certain transactions, perform short-range reorganizations, and extract the maximum MEV by reordering blocks to your favor.”
Defense against these threats includes “idle leakage,” a mechanism that gradually reduces staked ether from malicious or non-participating validators, and the social layer of consensus among the ethereum community on which chain to continue in the event of a split. .
These revelations underscore the importance of community awareness and technical safeguards to maintain the security and integrity of the ethereum network. They highlight that while ethereum's PoS system offers several security advantages, it also requires close monitoring and preparation to act against potential attacks.
3 trends in eth staking
As the ethereum staking landscape evolves, several key trends have emerged that reshape how stakeholders interact and benefit from the staking process.
Tom Wan, 21.co researcher, twitter.com/tomwanhh/status/1778053635857150020″ target=”_blank” rel=”noopener nofollow”>highlighted these in a recent post on x:
- Increase in popularity of re-gambling: Since 2024, there has been a significant shift towards staking recovery in the ethereum ecosystem. Rollover contributions have increased from 10% to 60% of total eth staked. Eigenlayer, in particular, has risen to prominence as the second-largest DeFi protocol on ethereum, with a total value locked (TVL) of $15 billion, representing 13% of all staked eth.
- Lido's market share decline: The rise of liquid staking rollover protocols has notably impacted Lido's dominance in the ethereum staking market. Lido's share has fallen below 30%, influenced by the growth of new platforms such as Etherfi, which has become the second largest stETH withdrawer since 2024, with total withdrawals of 108,000 stETH.
- Decrease in participation in the Centralized Exchange (CEX): Centralized exchanges' dominance in eth staking has seen a slowdown, declining from 29.7% to 25.8% since 2024. Kiln Finance recently overtook Binance to become the third-largest eth staking entity. Ether.fi is also gaining traction and is positioned to further challenge Binance's former dominance in the near future.
At the time of this publication, eth was trading at $3,526.
Featured image created with DALL·E, chart from TradingView.com
<script async src="//platform.twitter.com/widgets.js” charset=”utf-8″>
