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Don't count on CeFi to secure the Ethereum network

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We cannot count on Cefi, be it Coinbase, Lido (semi-cefi), or flashbot (centralized tool).

Original title: "Don't count on CeFi to secure the Ethereum network"

Original Author: @0xTodd, Partner at Nothing Research

There is no absolute in everything, ETH The advantages and disadvantages of PoS vs PoW must be disassembled into different dimensions to get the advantages and disadvantages. If you confuse security with decentralization, it becomes a chicken-and-duck talk, and everyone "talks about each other", then the discussion is meaningless.

Censorship resistance can at least dismantle Look at it from two angles:

If you want to review, how long can your transaction be unavailable on the chain;

If you want to review, can you guarantee that your transaction can still be on the chain;

;

Anti-51% attack can also be viewed from two perspectives:

If you want to attack, how much does the attacker need to pay;

If you want to attack, you can "rent" the possibility How much sex there is.

ETH to PoS, Decentralization and security cannot be discussed in terms of pure "higher" and "lower", because their scope is too broad. So, let's talk about them one by one. Originally, the article was written last week, but unfortunately I have been ill recently, so I have the energy to post it today.

Let’s talk about security first . There is no doubt that the cost of attack has become higher. This has been discussed many times, so it will be briefly stated here. You use powerful computing power to attack a PoW network, and what you actually pay is only the electricity bill, and your computing power will not be damaged by your attack, especially when the ETH graphics card mining machine accounts for a high proportion, it will be a big deal to dismantle it after the attack Mining machines sell graphics cards.

But PoS is different, if you Attack the ETH PoS network, and your mortgaged ETH chips will be wiped out. This increases the attack cost hundreds of times. You should know that attacking PoW is a temporary investment, while attacking PoS is a permanent expenditure.

However, from "Rentable "From this perspective, it's the other way around, it's getting slightly worse. To rent 51% ETH computing power, this is a "difficult" task. It's not a matter of cost, it's a matter of 1 or 0. This is mainly due to the physical properties of PoW, after all, miners are scattered all over the world.

But PoS is different , the circulation of ETH is 120 million pieces, and the stake of the beacon chain is currently 13 million+. Theoretically, as long as you "borrow" 5% of the ETH circulation, you can attack the network 51%. Of course, I'm not saying it's easy, it's still "very difficult", but it's no longer "difficult".

Moreover, the centralized world , Borrowing things may require mortgages, may rely on reputation, or even rely on power, such as supervision, which also introduces our second question.

Anti-transaction censorship is decentralized part of the characteristic. This discussion started here: https://twitter.com/TheEylon/status/1558911348255461378

In short, he believes that the current ETH beacon The chain 2/3 of its nodes are under US jurisdiction, which could bring censorship. The post is long, so take your time.

Take Tornado as an example, A tornado transaction, if US regulations require these 2/3 mining pools to ban this transaction, this will significantly increase the transaction chaining time. In the past, your transaction could go online in 12 seconds, but in the future it may take more than 30 seconds casually, or even a minute or two if you are lucky.

I calculated a curve ( The picture below), the probability of continuously banning you for one minute is about 10%, so it is still quite disgusting.

But in fact, this is not a problem of the PoS consensus, but a problem of the switch between China and the United States. In the past, the proportion of top mining pools in PoW was also very high, and the top 10 accounted for about 78%. If you join forces and want to censor your transaction and prevent you from going to the chain, it is also possible. https://etherscan.io/stat/miner?range=7&blocktype=blocks

However, there are many mine pools with Chinese background, and many mines are located in Russia and Central Asia. China and Russia can be said to be one of the few regions in the world where it is difficult for the United States to directly supervise. All this has nothing to do with the technology, but with the participants.

And today’s PoS mining pool , no matter Lido, or Coinbase and Kraken are all in the United States, so it is natural to be restricted everywhere. Although they are all making positive statements at present, judging from their tonality, it is still not a small probability event that they will review illegal transactions in the future. Therefore, in terms of review time, PoS is actually inferior to PoW.

However, there is one more indicator ——is to discuss the worst case, that is, whether you can guarantee that your transaction can at least be on the chain. Let's continue to calculate. If you still calculate according to 2/3, then in fact, in 98% of the cases, your transaction within 10 blocks must be able to be uploaded to the chain. There will always be mining pools that can ignore the requirements of US regulation, all you have to do is wait.

In other words, the United States can suppress your transaction for a few minutes, but it cannot suppress your transaction for a lifetime . This is completely different from AAVE shielding Sun Ge and Shenyu. AAVE is a single point, while the mining pool is multi-point.

In addition, only a small part Nodes still adhere to the bottom line and constantly change their own mining pools, so that your transactions can be uploaded to the chain.

Of course PoW can also be switched at will Mining pool, but the concealment of PoS is slightly higher. In life now, there will be many people who know that you run a mine, but few people who know what server you are secretly running a PoS node on. From this point of view, PoS is slightly better than PoW, but of course it is almost the same.

Many people will continue Deduction, if the regulator finds that although your privacy transactions are slow in the end, they can always evade sanctions, so they are determined to roll back directly, what will happen to you?

First of all, this is out of the The scope of transaction review can be roughly equivalent to directly attacking the network. The probability of this happening is very small, but it is also a hidden danger.

For example, your A tornado transaction was finally uploaded to the chain through a node that is not supervised by the United States. At this time, the supervision of the large mining pools that controlled 2/3 issued instructions, which can directly fork through the network, and directly delete the block containing your transaction, so that your transaction will never be uploaded to the chain. Since your transaction cannot be deleted, just reject your block directly. Judging from the current PoS, it is possible to implement it in a single echo.

For this case, ether Some people in the Fang community think that social slashing (social punishment) should be done, and the security deposit of nodes that do so should be confiscated directly. But in this way, it may enter a new totalitarianism. Ethereum should not adopt rules that are not written on the blockchain. Regarding this content, there is an article that organizes good information. https://twitter.com/akafish00/status/1560881889451601920

Moreover, the current mining pool nodes will be connected to MEV tools like Flashbot, but Flashbot is also subject to supervision, so that it may happen: transactions that do not meet the regulatory requirements will not appear in Flashbot's In the transaction list, the nodes that access it will also be affected by it. Therefore, more tools are also needed.

Today Coinbase came out and said, Never compromise with supervision, if you want to review, you would rather give up the business. But to be honest, Staking benefits are huge, and Staking APR is expected to reach 8%-10%, including 10%-20% commission. There are only a few million ETH in the Coinbase cold wallet. If you don’t do staking, you will lose tens of thousands of ETH a year.

It is impossible not to do this business; but it is also impossible to ignore the supervision.

So, we cannot count on Cefi , whether it is Coinbase, Lido (semi-cefi), or flashbot (centralized tool). We still need to improve and optimize the chain itself at the technical level, and this work is definitely a long way to go.

In this way, we can protect our Ethereum network.