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Vitalik Buterin Highlights Two Major Risks on the Ethereum Network

Ethereum co-founder Vitalik Buterin has identified potential risks in the Ethereum network, specifically related to the blockchain's staking protocol. He believes that Proof-of-Stake could lead to centralization, with large stakers dominating and small stakers dropping out to join larger pools. This could increase the risk of 51% attacks, transaction censorship, and value extraction. Buterin also notes that more prominent network participants can generate higher revenue by running sophisticated algorithms and can lease their locked-up capital to smaller users, shifting the risks to them. Buterin's understanding of these risks has grown over the past year, coinciding with Ethereum's upgrade to Proof-of-Stake. Despite the upgrade, the effect on Ethereum's native cryptocurrency, ETH, has yet to be reflected, as its price has decreased by 35.6% from its yearly high.

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