Ethereum Founder Proposes an Anti-Correlation Incentive Program

• Ethereum Founder proposes an anti-correlation incentive program to bolster decentralization in staking.
• Vitalik Buterin intends to impose penalties for mundane mistakes such as missing an attestation.
• The theory involved is the replication of mistakes in a decentralized blockchain network.

In a recent blog post, Ethereum Founder Vitalik Buterin proposed an “anti-correlation incentive” program to bolster decentralization in staking. The proposal intends to bring a penalty to validators’ “mundane failures” such as missing an attestation.

Notably, the theory that led Buterin to propose the anti-correlation incentive program is the replication of mistakes in a decentralized blockchain environment. To be more specific, in a network, any mistake a single actor makes is more likely to be repeated by the other “identities” that the actor controls. Thus, to minimize such issues, Ethereum introduced the anti-correlation incentive program. Pinpointing the aim of the program, Buterin narrated,

“This approach could potentially undermine the intended effect of promoting genuine decentralization by incentivizing superficial compliance with the anti-correlation mechanisms rather than encouraging a broader distribution of validation power.”

The penalty program includes punishment for a bad actor which increases with the replication of the misbehavior. Ethereum has already employed such a penalty program in slashing mechanics. As of now, such penalties were imposed only in a highly exceptional attack situation. However, with the new proposal, Ethereum intends to introduce the program into daily activities.

Buterin elaborated on the theory via the blog post, stating that the large stakers who run many validators on the same internet connection or the same computer might cause “disproportionate correlated failures.” Highlighting the potential impact of the anti-correlation incentive program on such failures, he added,

“This tactic could lead to a situation where large stakers, by investing in multiple diverse setups, manage to dilute the impact of correlated penalties, thus maintaining their economies of scale advantage while appearing more decentralized.”

Further, Buterin assured that the punishment mechanisms would be limited to the large validators and would not “disproportionately affect” smaller validators. In addition, Buterin asserted that the strategy intends to maintain operational efficiency along with decentralization and resilience of the network.