As Ethereum gears up for the Pectra upgrade set to take place in early 2025, a recent study conducted by Liquid Collective and Obol has brought to light several associated risks that need to be addressed.
The study emphasizes the significance of diversity among clients, operators, and cloud providers, as well as raises concerns about the limited adoption of distributed validator technology (DVT). In an interview with Cointelegraph, Matt Leisinger, the chief product officer at Alluvial, a software development company supporting Liquid Collective, shared insights:
Cointelegraph reached out to the Ethereum Foundation for comment but did not receive a response before the report was published.
Client and operator risks were highlighted in the report, with a particular emphasis on the potential consequences of a major bug in a dominant client leading to substantial slashing penalties and network instability. Staking through a single node operator was also identified as a risk, exposing staked assets to downtime and slashing risks.
The report stressed the importance of operator diversity for network health and avoiding single points of failure. Leisinger echoed this sentiment, stating:
The study also underscored the necessity of a wide geographical distribution of validators and cloud providers, citing recent outages at Hetzner and AWS. Distributed validator technology was identified as a key strategy for enhancing validator resilience by reducing correlated risks.
Leisinger further explained:
The upcoming Pectra upgrade for Ethereum, a combination of the Prague and Electra upgrades, will focus on changes to the network’s execution and consensus layers. Expected to go live in the first quarter of 2025, the upgrade will include the Ethereum Improvement Proposal (EIP)-7251. The upgrade will allow staking providers to consolidate their stake into fewer validators by raising the maximum effective balance to 2,048 ETH, reducing the number of validators required and easing pressure on Ethereum’s communication layer.