Improved Mechanism for ETH 2.0 Staking

zhous · July 17, 2020, 12:01pm

Would be a big discussion, I wish.

DAism2019/EIPs/blob/a6aa0e08105eba15f314eb03a9a58a2b376cf5ad/EIPS/eip-2794.md

---
eip: 
title: Improved Mechanism for ETH 2.0 Staking
author: Derek Zhou (@zhous), Hua Zhang (@dgczhh), Yuefei Tan (@whtyfhas)
discussions-to: 
status: Draft
type: Standards Track
category: Core
created: 2020-07-17
---

## Simple Summary
We propose a new staking protocol with an honor system to replace ETH 2.0's staking mechanism in which a node must stake 32 ETHs to be a validator and thus expose ETH 2.0 to extremely high risks. This proposal will bring strong and reliable security to ETH 2.0's staking.

## Motivation (Risk Analysis)
According to the latest released specifications of ETH 2.0, phase 0 needs to be activated by at least 16,384 nodes and this will lock at least 524288 ETHs till phase 1. In additon Ethereum's outshining potentials and future will undoubtedly attract more people to do this staking and cause more ETHs to be locked. Furthermore the ***ETH 2.0 Economics*** section in the official document "Ethereum Roadmap" discusses Staking Rewards from one million validators to 0ne hundred million and if this comes true a large amount of ETHs will be locked. All these factors will very likely drive ETH's price dramatically up.

As a rule of thumb, if ETH's price rises by ten times or has a hike like what happened in 2017, ETH 2.0's validators will be tempted to sell ETHs for fiat currencies or stable coin and it will be a huge financial burden for people who want to join staking. When this happens, on one hand a large number of existing validators will perform an exit, and on the other hand interested people who want to stake may not be able to afford the expensive cost. The consequence will be that ETH 2.0's security and reliability will be hit hardly.

Vitalik Buterin mentioned this kind of risk in a reddit post but he emphasized that although it may happen infrequently in pratice it may still happen. However, from our perspective, even if this happens once, it will be a disaster to Ethereum.

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Some related codes:

github.com

naturaldao/SmartContracts/blob/51907562297ee317f188b9017d5d7846e5b9d59d/contracts/Factory.py

# @dev Implementation of control contract
# @author radarzhhua@gmail.com
from vyper.interfaces import ERC20


# the contract of NDAO ERC20 token
contract NDAO:
    def mint(_to: address, _value: uint256): modifying
    def decimals() -> uint256: constant


# the exchange contract
contract Exchange:
    def setup(token_addr: address, ndao_address: address,
              token_amount: uint256): modifying


# the ICO contract
contract ICO:
    def setup(_name: string[64], _symbol: string[32], _decimals: uint256, _depositGoal: uint256,

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