A Deep Dive into Ethereum's Transition to Proof-of-Stake
We spoke with Figment team members Ben and Park, alongside Sreeram Kannan, a leading Ethereum expert and founder of Eigenlayer, to explore The Merge, Ethereum’s evolution, and its future.
Key Topics Covered:
- The Merge: Ethereum’s shift from proof-of-work (PoW) to proof-of-stake (PoS).
- Staking Mechanics: How ETH staking works and its post-Merge implications.
- Ethereum’s Roadmap: Upcoming upgrades like proto-danksharding and scalability solutions.
- Roles in PoS: Proposers vs. builders, liquid staking, and decentralization.
Ethereum’s Fundamental Value Proposition
Why Ethereum?
Ben (Figment):
Ethereum introduced programmability to blockchain via smart contracts, expanding decentralization beyond Bitcoin’s scope. Its open-source nature fueled innovation, enabling developers to build dApps, DeFi, and more.
Sreeram Kannan:
Ethereum separates trust from innovation. It provides a decentralized trust layer for applications, enabling a pseudonymous economy where reputation isn’t required to contribute.
The Shift to Proof-of-Stake
Why PoS?
Sreeram:
PoW was energy-intensive. PoS offers economic security (slashing for misbehavior) and better scalability. Ethereum’s PoS design emphasizes dynamic availability—progress continues even if 33% of nodes go offline.
Post-Merge Changes
- Validators replace miners.
- Staked ETH remains locked until withdrawals are enabled (post-Shanghai upgrade).
- Liquid staking (e.g., Lido, Rocket Pool) emerged to address liquidity needs.
👉 Learn more about ETH staking
Ethereum’s Future Upgrades
Scaling Roadmap
- Rollups: Offload computation to Layer 2.
- EIP-4844 (Proto-danksharding): Increases data bandwidth (80KB → 1.3MB/sec).
- Danksharding: Full implementation for higher throughput.
Sreeram:
"Ethereum’s PoS is uniquely robust—minority validators can slash misbehaving majorities."
Stakeholder Roles Post-Merge
| Role | Responsibility |
|------|---------------|
| Proposers | Propose blocks for consensus. |
| Builders | Order transactions (MEV optimization). |
| Liquid Staking Providers | Issue liquid tokens (e.g., stETH) representing staked ETH. |
Park:
Liquid staking balances capital efficiency with decentralization risks.
FAQs
1. Can I unstake my ETH now?
No. Withdrawals will be enabled after the Shanghai upgrade (expected 2023–2024).
2. Is staking safe?
Yes, but choose providers carefully. Trust and slashing history matter.
3. What’s Eigenlayer?
A protocol for re-staking ETH to secure other networks (e.g., rollups).
👉 Explore staking opportunities
Where to Learn More
- Figment: Website | Twitter
- Full AMA Recording: Twitter Spaces
Edited for clarity. Opinions expressed are participants’ own.
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