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Vitalik Buterin Debunks 51% Attack Possibility in ETH 2.0

Vitalik Buterin Debunks 51% Attack Possibility in ETH 2.0

Ethereum’s Vitalik Buterin has stood up against Arcane Assets’ Eric Wall regarding ETH 2.0’s vulnerability against 51% attacks. This is due to the launch of yETH vault, a new Yearn.finance yield farming scheme.

As per Buterin, even if one entity gets enough power to conduct a 51% attack in a Proof-of-Stake (PoS) powered blockchain, which will be the case once Ethereum’s Casper upgrade has been implemented, it will not be ‘fatal’ to the network as the said attack can only be done ‘once.’

The shift of Ethereum from Proof-of-Work (PoW) to PoS is particularly done to further decentralize and speed up the network. This is timely as the DeFi market, with the majority of the protocols being based in Ethereum, is going through the roof as it emerges as a billion-dollar-worth venture today.

With the introduction of yETH vault, the community is having doubts about how Ethereum can handle the surge of staking expected to be done on this protocol, in comparison to the soon-to-be-released mainnet.

Yet, Buterin explained how through the process of ‘slashing’ — wherein any validator acting maliciously toward the network will have a portion of their stake taken — the stability of the ETH 2.0 network can be preserved. The Co-Founder stands his ground that even if yETH gains more control of staked ETH, the network will not fail.

Mainly, Ethereum’s core developers want to open up more opportunities for the community to earn more profit as they maintain the network’s functionality. With the ETH 2.0, anyone can operate as a PoS validator and staking can be done with a minimum threshold of 32 ETH, with an ROI of around 4%–10%.

Strikingly, a staggering $100m ETH has now been deposited into the yETH Vault, generating a 94% APY. Despite this, some believe that the ability of yETH to deliver a long-run return greater than staked ETH is still yet to be tested.

Regardless, Yearn’s vault seems to be a more ideal choice as it promises much higher returns just by locking ETH in the yETH Vault that will generate DAI through Maker. Afterwhich, the amount of DAI will be utilized to earn yield and purchase ETH off the open market. This also brings up the risk of liquidity that will be dependent on Maker’s collateralization ratio.

Doubts regarding 51% attacks may have been influenced as well by Ethereum Classic’s hacking incidents that had inflicted damage in just one month. In response to this, the Ethereum Classic Labs has announced that they will pursue enforcement and regulation of hash rental platforms.

An aspiring journalist who spills her ideas in cryptocurrency and blockchain-related matters. With her background in Communication and Journalism, she is more inclined to write about reality than fiction.