Module 6 · Ethereum & Shared Applications / 6.6
Another way to agree on the next page.
What validators put at risk, and what their stake does not let them decide.
A town keeps a public record. Everyone can check whether a proposed entry follows the rules. But two valid entries may compete to become the next page.
Proof of work makes proposing an accepted history costly through computation. Proof of stake uses committed assets and protocol penalties. Both still need rules about what an acceptable page contains.
A deposit comes with duties.
In Ethereum, a validator commits ETH and runs software that participates in consensus. The protocol selects block proposers and assigns other validators to make signed statements, called attestations, about the chain.
Selection and influence depend on effective stake. This is not one wallet, one vote. Creating a thousand empty identities does not create a thousand equal shares of consensus power.
A proposed block must still satisfy the execution rules. A large stake cannot make a forged signature or an unauthorized transfer valid to an independently validating node.
The distinction is the same as before: validity decides what is allowed; consensus coordinates which valid history to follow.
Checking validity comes before selecting and finalizing an accepted history. This is not a stake-voting simulator.
The current Ethereum deposit numbers
A validator needs at least 32 ETH to activate. Following Pectra, an eligible compounding validator can have an effective balance up to 2,048 ETH. The minimum and maximum serve different roles; saying every validator is permanently fixed at 32 ETH is outdated.
Pools and services can accept smaller user deposits, but add contract, operator, custody, or liquid-staking-token risks. Running a node that independently checks the network does not itself require a 32 ETH deposit.
Agreement can become costly to reverse.
Ethereum has two related jobs inside proof of stake. A fork-choice rule helps nodes choose the current head of the chain. Checkpoint votes link parts of the history across epochs. A link needs votes representing at least two-thirds of effective stake; the protocol combines qualifying links to justify and finalize checkpoints.
Why does that threshold matter? With a fixed set of stake, two groups each holding two-thirds must overlap by at least one-third. Supporting conflicting finalized histories therefore requires a substantial overlap of validators making contradictory statements. The protocol defines which statements are punishable.
Finality means a conflicting finalized history would require a serious breakdown, including slashable behavior by at least one-third of the stake under the protocol’s safety assumptions. It is stronger than merely seeing a transaction appear in a recent block.
Validators earn protocol rewards and applicable transaction revenue for participating. They can lose rewards or balances for failures. Specific contradictory or forbidden messages can be slashed. Ordinary downtime is penalized differently; it is not automatically the same as double-signing.
If the network cannot finalize for a prolonged period, inactivity rules help it recover liveness by reducing the relative weight of non-participating stake. This is why a simple “51% controls everything” slogan does not explain every attack or failure.
The link reaches the two-thirds threshold. Finalization still requires the protocol’s sequence of qualifying checkpoint links.
Each group represents one-third of effective stake, not one validator or one person. This fixed-weight picture explains the threshold, not the entire consensus protocol.
Time, earnings, and supply
Ethereum uses 12-second slots and 32-slot epochs. Finality normally develops over roughly two epochs, but missed participation and network conditions can delay it. A clock alone does not guarantee finality.
Staking returns vary with participation, fees, operator costs, and penalties. Issuance adds ETH; fee burning removes it. Their balance can make supply rise or fall over a period. Proof of stake does not guarantee a permanently shrinking supply.
The constitution still belongs to people.
Think of validity rules as the constitution: the actions the system permits. Think of consensus as part of the procedure for keeping one official record under those rules. The analogy ends where human law, courts, and political legitimacy begin.
Changing Ethereum’s protocol takes proposals, implementation, testing, and adoption by participants. Staking does not give a validator a unilateral right to replace the rules on everyone else’s computer.
Proof of stake reduces the need for energy-intensive mining, while putting more of the security mechanism inside the asset and staking system. Large operators, pooled stake, infrastructure failures, and censorship remain concerns.
Proof of work has its own pressures: specialized hardware, energy costs, mining-pool concentration, and incentives that depend on revenue. Neither label means perfectly decentralized. Compare who can participate, who can block progress, what misconduct costs, and who can change the software people accept.
The execution history continues. This switch depicts a coordinated protocol upgrade, not an automatic change or required token exchange.
Does staking automatically make the rich own more?
If everyone’s balance grows by the same percentage, their ownership shares do not change. Ten units out of one hundred becomes eleven out of one hundred and ten: still 10%. In practice, participation, operating costs, delegation, fees, and penalties differ, so outcomes and concentration can change.
Proof of stake uses the native asset as part of its security mechanism. A fall in that asset’s value can reduce the outside purchasing-power cost of acquiring or sacrificing stake. That feedback is one concern to evaluate alongside liquidity, concentration, penalties, and the difficulty of mounting a particular attack; it does not prove that every price decline causes an attack.
The idea to keep
Deposits create incentives and penalties. They do not replace transaction validation or the human coordination behind protocol changes.