The ‘Black Swan Event’ Fear Affected Geth Ethereum Network Shares

A post from Lachlan Feeney, founder, and CEO of Ethereum infrastructure firm Labrys on January 23, stirred the crypto market, especially the Ethereum stakers. The post alerts that Ethereum validators could risk losing everything.  A bug is expected in the Geth network, hinting towards a ‘black swan event’. The bug is expected to a more than 80% vanish of ETH staked on the network. The news resulted in a 5% fall in Geth Ethereum Network shares.  

What’s Going on With Geth Network

On January 23, 2024, Geth’s market share of the ETH network execution clients declined 5.2% to 78.8% after heating 84% the day earlier. The fear of the ‘black swan event’, is considered to be the main reason behind the share fall.  

Geth, the abbreviation of Go Ethereum’s concentrated use could create risks for the Ethereum validators and may result in losing their staked ETH if it holds a critical bug. The claim raised concern over the Geth network’s diversity, hinting at the arrival of a ‘black swan event“.  

The network is critical in managing transactions and conducting smart contracts on Ethereum, but choices among Ethereum validators showcase an imbalance in execution client diversity, raising decentralization concerns.

The same was communicated by the Ethereum decentralization advocates, including the founding member of the ETHStaker community. “Superphiz”, one of the community members announced that the bug in Geth resulted in whipping out of ETH staked over the network. 

“I just want to alert you about the black swan event and tell you to use less robust clients to avoid the event”, the community member explained. 

Stakers can use less robust clients including Nethermind, Erigon, Besu, Reth, and others. 

Additionally, Geth’s current share exceeds 2/3rds, the critical bug would stop the chain from finalizing, as per Feeney. Also, an inactivity leak due to going offline, on the other hand, will result in staked ETH burning until the implementation recalibrates to a 33.3% share of the network. 

“Around 90% of the validator’s staked ETH can be vanished in around 40 days”, added Feeney. Also, there is a small exit window for the validators and limit their losses. The network operates a rate-limited queue for exiting from the network. 

What Next? 

Despite these ups and downs, Nethermind, another big execution client’s share increased from 8% to 14% on January 23. However, Geth met all the technical requirements since initiating Ethereum staking. 

In addition, the upcoming ETH ETF events can also influence the functioning of Execution clients like Geth, Nethermind, and Besu as well as the ETH staking environment.                

Disclaimer 

This article is for informational purposes only and does not provide any financial, investment, or other advice. The author or any people mentioned in this article are not responsible for any financial loss that may occur from investing in or trading. Please do your research before making any financial decisions.

Steefan George is a crypto and blockchain enthusiast, with a remarkable grasp on market and technology. Having a graduate degree in computer science and an MBA in BFSI, he is an excellent technology writer at The Coin Republic. He is passionate about getting a billion of the human population onto Web3. His principle is to write like “explaining to a 6-year old”, so that a layman can learn the potential of, and get benefitted from this revolutionary technology.