Vitalik Buterin, a co-founder of Ethereum, has expressed worry about the possibility that decentralized autonomous organizations (DAOs) could monopolize the choice of node operators in liquidity staking pools. Buterin cautions that using the DAO approach for governance over node operators, who are in charge of the pool’s cash, could put them in danger from bad actors in a blog post on September 30.
Buterin emphasizes that depending on just one layer of security may not be sufficient and uses the staking protocol Lido (LDO) as an example of a DAO that whitelists node operators. He admits that precautions against this have been established in procedures like Lido, but one line of defense might not be enough.
Buterin clarifies that Rocket Pool enables anyone to become a node operator by making a deposit of 8 Ether (ETH), which is now valued at about $13,406. However, this strategy also carries some hazards because it permits 51% of network attacks by attackers and makes consumers responsible for the majority of the costs. Buterin advises encouraging ecosystem users to utilize a range of liquid staking providers to alleviate this problem, which would lessen the possibility of any one source growing too big and posing a systemic risk. He does, however, issue a warning that relying excessively on moralistic pressure to address issues may result in a long-term unstable solution.