Vitalik Buterin Proposes Method to Ensure Validator Anonymity within Ethereum Network

▲ Vitalik Buterin/Source: X ©

A groundbreaking proposal has emerged to make validator identities completely untraceable on the Ethereum (ETH) network, where a massive fund exceeding $71 billion is locked, drawing significant market attention. Vitalik Buterin, co-founder of Ethereum, unveiled a major network overhaul plan to ensure validator anonymity, stating his intention to facilitate the influx of institutional investors.

According to crypto media outlet Finbold on July 6 (local time), Vitalik Buterin revealed a multi-stage redesign of Ethereum's consensus layer through a proposal document titled 'The Extremely Lean Chain.' The consensus layer is a core component that manages network staking, validator consensus, and finalization. The essence of this proposal is to abandon the existing epoch-based reward settlement method and introduce a new model where validators prove their balance daily using STARK proofs, a form of Zero-Knowledge Proof (ZK).

Looking at the specific roadmap, Phase 1 involves removing public keys (Pubkeys) and reward calculation functions from the Beacon Chain, replacing them with a 5-byte index and a daily STARK-proven balance. In this phase, even if proof is delayed, no separate slashing penalty will be imposed. In Phase 2, the validator registry will be updated daily, and each validator's identity will be randomly reset, ensuring that only the validator themselves can link their past and present activities.

Vitalik Buterin's reason for introducing proven zero-knowledge privacy technology into the staking industry is to lower entry barriers for institutional investors. It is analyzed that if a scalable staking environment with guaranteed security and anonymity is created, large institutions reluctant to expose their funds could flow in en masse. According to crypto data platform CryptoQuant, Ethereum's current staked volume has reached an all-time high of approximately 40.5 million ETH, valued at about $71.44 billion.

Indeed, Tom Lee's Ethereum staking service is considered one of the major institutional staking services within the network and is expected to directly benefit if this upgrade passes. Furthermore, Bitmain Immersion Technologies also stated in a recent report that it was staking 4,879,157 ETH, valued at approximately $8.6 billion at the time of the report.

The media diagnosed that if Buterin's upgrade proposal is finally adopted, Ethereum's price could enter a bullish scenario, driven by strong institutional demand. Furthermore, the macroeconomic Ethereum price forecasts from top industry experts, including Robert Kiyosaki, also remain optimistic.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*