Vitalik Buterin reveals why a 51% attack won’t be a “fatal blow” to Ethereum 2.0

Ethereum co-founder Vitalik Buterin refuted concerns that the explosion of DeFi projects might accumulate too much ETH, making the Ethereum network vulnerable to a 51% attack, arguing that although attackers might have a chance to launch an attack, they would soon be split or soft-forked, losing control of their coins.

Ethereum co-founder Vitalik Buterin has refuted claims that a 51% attack would be a “fatal” blow to Ethereum 2.0.

The reason for this concern is that Yearn.finance’s yETH vault has become so popular that it has accumulated more than 137,000 ETH on the first day. Eric Wall, chief intelligence officer of Arcane Assets, said that this means that yETH vault administrators may eventually control enough ETH to theoretically launch an attack on Ethereum 2.0.

ITT: We’ve come up with some interesting ways that yETH vault strategists could exploit the fact that yETH could potentially control enough ETH to launch a 67% attack on Ethereum 2.0, which is based on PoS.

However, Buterin downplayed the risk posed by a 51% attack on ETH 2.0, the PoS-based network, claiming that malicious actors “would have one opportunity to launch an attack” but would quickly be forked or soft-forked and lose control of the coins needed to sustain the attack.

“We need to forget the myth that if one entity acquires enough assets to launch a 51% attack, it will deal a ‘fatal’ blow to the PoS network. The reality is that they might be able to attack once, and then they will either be forked off or (in the case of a censorship attack) soft-forked, and they will lose their coins so they can’t attack again. https://t.co/utash1hUDU” — vitalik.eth (@VitalikButerin) September 2, 2020

Buterin took the opportunity to compare PoS and PoW mechanisms to highlight the high risk that 51% attacks pose to PoW networks (such as Bitcoin and Ethereum 1.0) because there are no staked coins and there is no "possibility of removing the attacker's hardware without removing everyone else's hardware." He concluded the post by saying:

“This is a critical and underappreciated fundamental advantage of PoS over PoW.”

Ethereum Classic (ETC), which uses PoW, has suffered three 51% attacks in the past month, raising major concerns about the network’s security.

However, many in the crypto community remain skeptical of Buterin’s explanation, as identifying the correct fork is difficult and the attacker would continue to control the main chain.

However, Sebastian Moonjava of social finance platform Real Vision explained that due to the more intense competition in DeFi, the risk of a 51% attack should decrease over time. This will make it increasingly difficult for the yETH vault to obtain more than 51% of ETH.

Competition will be fierce. The free market will likely suppress the possibility of this. More participation in development, more use cases = less risk of 51% attacks.

yETH vaults allow users to lock up ether, and then the protocol automatically switches to the highest yield or interest rate strategy. Yearn Finance, the company behind yETH, is the sixth most popular DeFi project, with $876 million locked up, according to DeFi Pulse.

Source: Cointelegraph