A Rocket Pool advocate has warned of the potentially catastrophic consequences of a bug in Geth, one of ethereum's main validator clients. The analyst is concerned that excessive customer dependence, especially by major protocols, particularly Lido Finance, poses a significant centralization risk that could “adversely impact reliability and stability.”
Geth's overdependence on ethereum is very risky
Geth is one of the first and main ethereum clients. Node operators can process and update the blockchain through this validator client, ensuring that all transactions are valid. What's important to note is that Geth and similar clients play a critical role in ethereum following the shift from a proof-of-work system to a proof-of-stake system.
Users can stake their coins through platforms like Lido Finance or Rocket Pool and receive a share of staking rewards. As a result, the majority of Lido Finance validator nodes depend on Geth.
As for X, the defender points out that almost 80% of Lido Finance node operators trust Geth as their reference client. Other option validating clients for Lido Finance include Nethermind and Besus.
This concentration of power could have disastrous consequences, even leading to a fork, in the event of a critical error on Geth.
Still, looking at the trends of the last few quarters until March 2023, there have been attempts at decentralization regarding Lido Finance node operators. As an example, Geth customer participation fell from around 80% in April 2021 to 76% in early 2023. Meanwhile, more Lido Finance node operators have opted to use Nethermind in the past year, based on its rapid share increase from 5.5% to around 12.8%.
Clients like Nethermind and Besu play a similar role to Geth in ensuring the network stays up to date and secure. However, they offer different features and approaches to ethereum node operation.
For example, Nethermind is considered to be more flexible and have higher throughput with lower latency than Geth. Consequently, by ensuring that Lido Finance and other staking platforms diversify their validator clients, it could spread the network's workload and reduce concentration on Geth.
Lido Finance is the king of liquid betting and it is becoming decentralized
So far, DeFiLlama data sample Lido Finance is the largest decentralized finance (DeFi) protocol by total value locked (TVL), managing over $22.4 billion in assets.
As a liquid staking protocol that allows ordinary users to participate in validating ethereum blocks, the protocol is critical to ensuring the network remains secure.
The team technology/” target=”_blank” rel=”noopener nofollow”>inserted distributed validation technology (DVT) in October 2023 to ensure it is secure and decentralized. Through DVT, your validators can distribute operations across multiple parties, effectively decentralizing.
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