Ethereum’s Vitalik Buterin dismisses concerns of 51% attack on ETH 2.0 🚨 This article is 4 years old...
Ethereum’s Vitalik Buterin dismisses concerns of 51% attack on ETH 2.0
2 min read
Updated: Sep. 6, 2020 at 8:59 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Ethereum co-founder Vitalik Buterin has downplayed any concerns about a potential 51% attack on the network’s upcoming ETH 2.0 upgrade, which sees it shift to a proof of stake consensus design.
Yield farming lockups create concerns
After yield farming aggregator Yearn Finance launched its yETH vault earlier this week, the protocol attracted over 137,000 ETH on the first day itself. The vault pays out yields to those who lock their holdings on the platform from the returns generated by the interest gained on that locked up ETH on different platforms.
But Eric Wall, the chief intelligence officer of Arcane Assets, raised concerns around the unusually large amount locked up. He said on a tweet that the yETH vaults can, theoretically, control and launch an unprecedented 51% attack on the Ethereum network due to its sheer size.
ITT: We come up with fun ways yETH vault strategists can take advantage of the fact that yETH is probably going to control more than enough stake to 67%-attack ETH 2.0 PoS
— Eric Wall (@ercwl) September 2, 2020
“We come up with fun ways yETH vault strategists can take advantage of the fact that yETH is probably going to control more than enough stake to 67%-attack ETH 2.0 PoS,” said Wall.
However, Buterin said the risks associated with 51% attacks targeting the upcoming upgrade were unfounded, stating the malicious actor “could attack once,” but would quickly lose control of the network by the actions of other participants:
We need to get past the myth that it's *fatal* if one entity gets enough to 51% attack PoS. The reality is they could attack *once*, and then they either get slashed or (if censorship attack) soft-forked away and inactivity-leaked, and they lose their coins so can't attack again. https://t.co/utash1hUDU
— vitalik.eth (@VitalikButerin) September 2, 2020
He added:
“In proof of work, on the other hand, a successful attacker can just attack over and over again, with no possible way to delete their hardware without deleting everyone else’s hardware. This is an underrated key fundamental advantage of PoS over PoW.”
Ethereum fork suffers third 51% attack
The concerns came days after an Ethereum fork, Ethereum Classic, was hit by the third 51% attack in the past few weeks alone. The network’s security has been heavily criticized and questioned since.
As of yesterday, the parent foundation behind Ethereum Classic said it will launch a legal complaint to find out the attackers and bring them to justice. However, this move is controversial — there is no regulation around blockchain and any vulnerability can be exploited without a legal backlash.
Meanwhile, Sebastian Moonjava, an analyst at the social finance platform Real Vision, said that the risk of a 51% attack should decrease over time due to more competition in DeFi:
Competition will be fierce. Free market will probably dampen the likelihood of this being existential.
More people building. More use cases = less risk of this. https://t.co/FT0ZDL9Cvs
— ?Sebastian Moonjava? (@theDAOKING) September 2, 2020
As for now, the DeFi market is booming like none other. Uniswap, the decentralized exchange, has started to see over a billion dollars in daily trading volumes as coins like SUSHI and YFII pump to new highs.
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Ethereum is a decentralized, open-source blockchain platform that enables the creation of smart contracts and decentralized applications (DApps).