No mention of sanctions?
It's estimated that ~50% of staked value is held by US companies. These companies are going to have to make an impossible choice. Either:
1. Sign transactions coming from the sanctioned addresses, inviting the wrath of OFAC.
or:
2. Refuse to sign these transactions.
2a. If between 33% and 66% of the network refuses, the network will penalize dissenters by slashing their staked coins, until they no longer have a 33% stake. Billions of dollars of customer funds could be lost.
2b. If > 67% of the network refuses, transactions can be successfully censored. Now we no longer have decentralized ETH, we have "USA coin", where the government can censor anyone with a quick email to Brian Armstrong.
I don't see a way out. It doesn't look like the network is actually decentralized enough to handle a nation-state attack. This was not an issue with the old proof of work scheme. I'll be amazed if the merge is not delayed while they work on a solution to this.
EDIT: If Coinbase does lose that money, you could say the network is operating as designed in the presence of a hostile validator. But a LOT of people are not going to be happy with the result.
It's estimated that ~50% of staked value is held by US companies. These companies are going to have to make an impossible choice. Either:
1. Sign transactions coming from the sanctioned addresses, inviting the wrath of OFAC.
or:
2. Refuse to sign these transactions.
2a. If between 33% and 66% of the network refuses, the network will penalize dissenters by slashing their staked coins, until they no longer have a 33% stake. Billions of dollars of customer funds could be lost.
2b. If > 67% of the network refuses, transactions can be successfully censored. Now we no longer have decentralized ETH, we have "USA coin", where the government can censor anyone with a quick email to Brian Armstrong.
I don't see a way out. It doesn't look like the network is actually decentralized enough to handle a nation-state attack. This was not an issue with the old proof of work scheme. I'll be amazed if the merge is not delayed while they work on a solution to this.
EDIT: If Coinbase does lose that money, you could say the network is operating as designed in the presence of a hostile validator. But a LOT of people are not going to be happy with the result.