Decentralization Is Good or Not? Defending Consensus in Ethereum 2.0

Proof-of-Stake (PoS) protocols are widely accepted as a viable substitute for the Proof-of-Work-based consensus, which is why recent blockchain-based cryptocurrencies and applications, most notably Ethereum 2.0, are using some variant of PoS as the basis for the consensus protocol. However, the implementation of PoS protocols in Ethereum 2.0 are not without its share of problems and vulnerabilities, especially with respect to the malicious behavior of validator nodes. In this paper, we first review the basic tenets of PoS protocols. We then discuss some of the recently described attacks on the Ethereum 2.0 consensus, and we also show that some of the design rationales adopted in PoS implementation—the decentralization of the voting process in particular—have, in actuality, enabled attacks that can be launched at a very low cost to the attacker. We also propose simple remedies that can reduce or eliminate the impact of those attacks and can evaluate the performance of the Ethereum 2.0 consensus when these remedies are applied.