Ethereum developers have released a developer network to test validator staking withdrawals, a feature currently missing on the network.
Ethereum developer Marius Van Der Wijden said the devnet will help prepare Ethereum to open up validator staking withdrawals next year with a planned upgrade called Shanghai. The lack of the feature has raised some fears about centralization risks after Ethereum migrated to proof-of-stake consensus.
“It’s the first devnet that enabled withdrawals on all of these implementations and is a big step forward,” Van Der Wijden told The Block. “It also helps other clients to test their implementations by joining the network.”
Ethereum clients, teams that build validator software, are testing staking withdrawals to prepare for Shanghai and find any potential bugs, Van Der Wijden said. He clarified that the ongoing devnet only focuses on withdrawals and separate Shanghai features have yet to be tested.
Why are staking withdrawals important?
A necessary condition for Ethereum’s migration to proof-of-stake consensus, also called The Merge, was that users had to stake or pool assets on the network. They could stake themselves or delegate ether to firms offering staking services, the latter being the more convenient choice.
Once users staked enough ether, however, a new issue came to light — users couldn’t withdraw from staking providers, as that mechanism remains to be implemented.
After The Merge, staking entities such as Coinbase, Kraken, Binance, Staked.us, Bitcoin Suisse, stakefish and Figment have come to control a significant portion of ether deposited in validator nodes and make decisions on behalf of stakers. Since a large majority of network stake and validators are currently overseen by few entities, experts within the Ethereum community have previously expressed concerns that the network was now prone to centralization risks.
Some of these concerns can be alleviated when ether withdrawals are reopened, as that would allow users to remove their stake from validators they don’t agree with. Once the feature is live, users can also perform “solo staking,” a process of running independent validators. Shanghai will give users the ability to swap staked ether (stETH), a popular liquid staking token, to normal ether. The former token is often plagued with liquidity issues.
A total of six client teams are participating in the devnet including Lodestar, Teku, Lighthouse, Nethermind and Geth, Van Der Wijden said.
© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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