Cardano has been running a PoS-based consensus protocol since the Shelby update in 2020. It is the first blockchain network built on peer-reviewed research and has been running flawlessly since 2020. Also, it is the first consensus protocol based on proven and secure PoS. The ethereum merger was finally produced on September 15, 2022, after years of development. Ethereum’s move to a PoS from a PoW was made possible by merging its PoW mainnet with the beacon chain (a separate PoS-based blockchain). However, most Bitcoin maximalists have been spreading misinformation about Ethereum after the merger. They claim that Ethereum PoS is now the industry standard for PoS-based networks. They conveniently ignore the nuances and features of other PoS-based blockchains, particularly Cardano. A Proof of Stake is a consensus mechanism that protects you from Sybil attacks. Here, the network chooses a validator to verify the transactions based on the tokens they have staked on the network as collateral. A Sybil attack is a security threat where a person or organization creates multiple accounts or nodes to take control of a network. PoS increases the cost of the attack significantly, as the attacker must buy many tokens to stake. It is important to note that there are variants to the PoS mechanism and that blockchains use any of these variants. Therefore, it is important to compare the differences between Ethereum PoS Y Cardano.
for a correct comprehension, the differences between them will be based on the following factors; SlashingLocking periodParticipation thresholdCustodial staking
#cardano just embrace the #Vasil upgradeIts the right time to look back at the groundbreaking successes of #cardanoA novel consensus protocol based on Proof of stake (PoS) is one of themSo let’s compare & contrast the PoS of #cardano with PoS of #Ethereum 🧵👇— Sooraj 🚢 (@Soorajksaju2) September 22, 2022
Some PoS-based blockchains use slashing as a tool to prevent malicious behavior. They also use it to impose monetary penalties and hold network participants more accountable. Ethereum validators are the most susceptible to staking penalties. If they fail, around 100% of the staked funds are at risk. 99% of the time, honest actors have been slashed due to technical errors. Although slashing is a punishing method that results in loss of funds, its risk far outweighs the incentive to earn returns. For this reason, participation in the network is scarce. Many people or entities would refrain from fully participating in the network. Once you stake your ETH, you release the rights to your ETH to the ethereum network. By comparison, Cardano’s PoS implementation does not involve staking. Cardano has a unique distribution mechanism to reward shareholders who behave rationally. Anyone can participate in the network and should not fear losing their rights to their ADA tokens at the cardano network. Therefore, Cardano’s PoS implementation encourages more participation in the network than Ethereum’s.
Ethereum has an infinite lockup period. You cannot unlock your ETH after the merge. In contrast, the Cardano PoS does not have a lock-in period. Any ADA holder can move their ADA tokens at any time with no restrictions or penalties. Therefore, participation in the network is easier and hassle-free.
Cardano has minimal participation requirements and allows anyone to run a validator node. This amount is 5.5 ADA (or 2.49 USD). In contrast, Ethereum requires at least 32 ETH (or $40,937 USD) for anyone to run a validator node. Many community members will not be able to become Ethereum validators due to this high participation threshold.
Custodial staking has similarities to delegation, but you do not own the crypto. For example, if you have 5 ETH, you cannot directly participate in the network due to some arbitrary limit set in the protocol. If you insist on gambling, you should use parking services like Lido or exchanges like Kraken and Coinbase. In this way, you release control of your ETH to the exchange or the Smart Contract. There is also the risk of staking if there is a bug or the smart contract becomes vulnerable. The combination of these factors causes many people to release control of their ETH to entities (such as Lido) and centralized exchanges such as Kraken. Thus, the centralization of the Ethereum network occurs. Right now, three entities control more than 51% of the Ethereum network. On the contrary, Cardano encourages non-custodial staking, in which you can participate in the network without losing the rights to your ADA tokens. This well-planned incentive mechanism and better user experience with staking have positively affected the decentralization of the Cardano network. Twenty-four entities must be combined before they can control more than 51% of the network. Cardano’s PoS mechanism is better because it incentivizes participation in the network and leads to better decentralization of the network. However, Ethereum discourages participation in the network and allows three entities to control more than 51 percent of the network.
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