The Ethereum development team has launched a developer network to test validator staking withdrawals, a capability that is presently absent from the network.
Ethereum engineer Marius Van Der Wijden said that the devnet would assist in preparing Ethereum to enable validator staking withdrawals in 2019 with the Shanghai upgrade. After Ethereum transitioned to proof-of-stake consensus, the absence of this functionality has generated some concerns regarding centralization threats.
He stressed that the current devnet mainly focuses on withdrawals and that Shanghai-specific features have not yet been tested.
In order for Ethereum to make its switch to proof-of-stake consensus, popularly known as “The Merge,” users have to stake or pool their funds on the network. They might stake ether personally or outsource it to businesses that provide staking services, with the latter being more convenient.
Once enough ether was staked, however, a difficulty arose: customers were unable to withdraw from staking providers since the withdrawal mechanism had not yet been developed.
As a result of The Merge, staking platforms including Coinbase, Kraken, Binance, Staked.us, Bitcoin Suisse, stakefish, and Figment now have access to and control a significant amount of the ether staked in validator nodes. Since a small number of companies presently control the vast majority of network stakes and validators, experts in the Ethereum community have previously voiced worry that the network is now vulnerable to centralization threats.
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.