Geth Ethereum network share falls 5% after fears raised of ‘black swan event’ – FXStreet


Cointelegraph Team Cointelegraph Team

Ethereum execution client Geth has seen its market share fall after community members raised concerns over the network’s diversity, fearing Geth’s concentration could lead to a “black swan event.”
On Jan. 23, Geth’s market share of the Ethereum network execution clients fell 5.2% to 78.8% after reaching 84% the day prior.
Geth is critical in handling transactions and executing smart contracts on Ethereum, but its preference among Ethereum validators has led to an imbalance in execution client diversity on Ethereum, sparking centralization concerns.
Ethereum decentralization advocates, including the founding member of the ETHStaker community, known as “Superphiz,” stressed in a Jan. 24 post on X (formerly Twitter) that a bug in Geth could lead to a more than 80% wipeout of Ether (ETH $2,234) staked on the network.
“I’m not trying to convince you that every execution client is as robust or as mature as Geth. I’m just telling you that it’s a good idea to use less robust clients to prevent a black swan event,” he explained in another post.
Lachlan Feeney, founder and CEO of Ethereum infrastructure firm Labrys, suggested in a Jan. 23 blog post that Ethereum validators could risk losing everything.
Staked ETH is not risk-free yield. Would you invest a minimum of $75,000 USD into an instrument where the maximum potential gain is 3.5% p.a. but the potential for loss is 100%?
“Probably not, but this is what 84% of the Ethereum stakers are doing today,” Feeney added.
As Geth’s current share exceeds 2/3rds (or 66%), Feeney said a critical bug would “instantly stop the chain from finalizing.”
In that scenario, Geth validators that go offline would be subject to an “inactivity leak,” which results in the burning of their staked Ether until the execution recalibrates to a 1/3rd (or 33.3%) share of the network.
Feeney said 90% of a validator’s staked Ether could be wiped within roughly 40 days.
Comparatively, a validator taken offline due to a minority client bug that does not stop the chain from finalizing would lose just 0.4% of its stake in 40 days.
However, Feeney told Cointelegraph there would be a “very small window” for validators to exit and limit their losses, as there is a rate-limited queue for how many validators can exit per epoch.
Nethermind, the second-largest execution client, increased its share from around 8% to 14% on Jan. 23.
Nethermind’s increased uptake came despite it identifying and fixing a critical bug in several versions of its execution client that caused users to fail to process blocks on Ethereum two days earlier.
Coinbase, one of the largest Ethereum validators running on Geth, announced its plan to transition to a multi-client infrastructure in the coming months.
The exchange explained Geth was the only Ethereum execution client that met its technical requirements since it started Ethereum staking in 2020.
“However, the tide is turning,” said Coinbase.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.
Join Telegram
Join Telegram
Bitcoin price slipped to a low of $38,555 on Binance, early on Tuesday. The crypto market bloodbath saw an increase in selling pressure on BTC, driving prices lower. BTC climbed back above the psychologically important level of $40,000 on Wednesday.
The SEC is attempting to flip one of its biggest losses into some semblance of a victory. This is evident by the most recent filing from the regulatory body against Ripple seeking court intervention over undisclosed document requests.
Immutable X (IMX) price did well across December, with the gaming and metaverse sectors standing out while contending ecosystems struggled. While the project eventually found inflection with holders cashing in, things may change soon.
Sei price has shed 35% in under six days, due to excessive selling pressure. After a liquidity run below the $0.585 swing low, SEI triggered a 13% recovery rally. Going forward, the $0.690 and $0.701 resistance levels will be pivotal in determining the trend going forward.
Bitcoin currently trades around $41,094 after dropping 4.60% on Thursday, putting an end to the $2,000 trading range. This move comes after Adam from GeeksLive noted that the volatility level of BTC dropped to a new low in a month.
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer.
Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts.
Opinions expressed at FXStreet are those of the individual authors and do not necessarily represent the opinion of FXStreet or its management. FXStreet has not verified the accuracy or basis-in-fact of any claim or statement made by any independent author: errors and omissions may occur. Any opinions, news, research, analyses, prices or other information contained on this website, by FXStreet, its employees, clients or contributors, is provided as general market commentary and does not constitute investment advice. FXStreet will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.


Leave a Reply

Your email address will not be published. Required fields are marked *