Ethereum Software Client Centralization Sparks Concern

Ethereum nodes are mostly concentrated in one execution client, triggering worries that a large portion of ETH can be wiped out if there’s an exploit.

Go Ethereum (Geth) clients currently make up 84% of all nodes running Ethereum software, representing an important threat–especially after another client, Nethermind, encountered and resolved a bug on Sunday.

The 84% represents a 20 point surge from last year, when Geth clients ran 63.9% of Ethereum nodes.

Supermajority Client

Software engineer Cygaar pointed out that thanks to the overwhelming number concentrated in Geth, the software implementation is considered a “supermajority client.” This means that validators running Geth can finalize Ethereum’s blockchain without needing agreement from smaller clients.

According to Cygaar, the users should diversify Ethereum clients, favoring options such as Nethermind (8.1%), Besu (4.97%) or Erigon (1.6%), among others.

Cygaar added that Coinbase, Binance, and Kraken are only using Geth, while the largest staking pool on Ethereum, Lido, has a 76% stake in Geth.

Jimmy Ragosa, governance advisor to Sismo, a sovereign identity aggregator, joked that Eigenlayer should delete all the points of users who are re-staking liquid staking tokens from protocols that run more than 67% of Geth clients.

In fact, Lido Finance has been criticized for being a source of centralization itself, commanding 74% of all liquid staking, as per DeFiLlama.

Millions of ETH Destroyed

The concern, says Cygaar, is that a critical bug in the Geth client could result in millions of ETH destroyed from validators.

Lefteris Karapetsas, founder of privacy-focused portfolio manager, Rotkiapp, wrote that in the case of a bug that leads to the complete loss of the stake of validators running a supermajority client, “at the moment this would burn > ~20% of the entire ETH supply.”

Karapetsas calls the scenario “chaos, armageddon,” which must be avoided at all costs. He added that there is no incentive to run a minority client, at the moment.

But that’s not all. A bug could also mean a chain unable to finalize, ending up “in a world with incorrect forks,” Cygaar said.

Karapetsas said large stakers are in a position to make an impact.

“We need Lido Finance, Coinbase, Kraken, and Figment to take action,” he said. According to him, they have the resources to easily switch their infrastructure.

He concluded, “Please take action for the good of the network and your end users.”