Coinbase Cloud supports client diversity on Ethereum by distributing validators across Lighthouse and Prysm

Earlier this year, the Ethereum community rallied around client diversity as a primary concern for infrastructure providers. At that time, we shared an update on what Coinbase Cloud is doing about it, and today, we’re excited to provide another update on our efforts.

We completed our work on remote signers for Lighthouse, offering double signing protection via high watermark software. This let us reach an important milestone: currently, our validators are distributed roughly evenly across Lighthouse and Prysm to support client diversity on Ethereum. 

Additionally, while we greatly appreciate the Ethereum community's excellent public dashboards to advance client diversity, we are excited to provide a first-hand update: Coinbase now has 65% of its validators on non-Prysm clients for eth2 staking. 

These are important milestones for our team and broader ecosystem, and we intend to do even more. In the near term, we will explore support for additional consensus and execution clients, validator ratings, and distributed validator technologies, to ensure we are continuing to diversify our infrastructure, while providing our customers with the highest security possible.

Why are clients important?

An Ethereum client is a software implementation that allows people or entities looking to run an Ethereum node to connect to the network and interact with it. Clients are built to the specifications of the Ethereum blockchain. They dictate how nodes behave on the network and govern specific functions, including:

• Networking: How the nodes communicate with one another

• Preserving state data: A client stores the state of the entire Ethereum blockchain at a given time

• Synchronization: How the client syncs data

• RPC API: The interface through which the client communicates with the blockchain (and vice versa)

• Wallet functionality: Ability to sign transactions with the account’s private key

Client types have expanded as the Ethereum blockchain prepares for the transition to proof of stake. Prior to the deployment of the proof of stake Beacon Chain (eth2), all of the above functions were governed by one client type. Now, functions are split between consensus and execution-level clients across Ethereum’s proof of work and proof of stake chains. Consensus-level clients, which are the focus of this post, choose which blocks should and should not be included in the canonical chain.

Following the merge of Ethereum’s proof of work and proof of stake chains (“the merge”), a full Ethereum node will need both execution and consensus-level clients. 

Why client diversity matters

Client diversity is critical for the overall health of the network, and protecting the individual validators and their financial stake.

Today, there are six main consensus client implementations on Ethereum: Prysm, Lighthouse, Teku, Nimbus, Grandine, and Lodestar. By design, eth2 staking encourages client diversity by providing strong incentives to diversify and avoid situations that could trigger penalties to the validators, such as an inactivity leak or correlated slashing. 

Having more than 33% of validators concentrated on a single client could have adverse consequences in the event of an attack or a bug. Consequences could range from inability to finalize the chain (with penalties for validators) to loss of information integrity on the blockchain. 

To reduce the likelihood of these scenarios, it’s critical to continue to diversify clients’ individual validators below 33% concentration.  

Today, Prysm is the most commonly used consensus client on Ethereum. Earlier this year, Prysm was run by over two thirds of validators, which could have put Ethereum in a loss of information integrity scenario. As a major validator operator on Ethereum, we know that we need to do our part to support client diversity. 

What we are doing to improve client diversity

Coinbase Cloud is committed to growing web3 and is deeply invested in the health of these networks. We want to empower token holders to participate securely and with peace of mind.   

Distributing our validators across Prysm and Lighthouse with high watermark remote signers is a milestone for our team. But keeping Ethereum decentralized and secure with client diversity is a consistent effort.

We are excited to work with our customers and the community at large to explore additional technologies and opportunities to contribute to decentralization. 

The exact allocation of Coinbase Cloud's validators across Ethereum clients is subject to network fluctuations, operational capacity and requirements, and other variables.

This document and the information contained herein is not a recommendation or endorsement of any digital asset, protocol, network, or project. However, Coinbase may have, or may in the future have, a significant financial interest in, and may receive compensation for services related to one or more of the digital assets, protocols, networks, entities, projects, and/or ventures discussed herein. The risk of loss in cryptocurrency, including staking, can be substantial and nothing herein is intended to be a guarantee against the possibility of loss.

This document and the content contained herein are based on information which is believed to be reliable and has been obtained from sources believed to be reliable, but Coinbase makes no representation or warranty, express, or implied, as to the fairness, accuracy, adequacy, reasonableness, or completeness of such information, and, without limiting the foregoing or anything else in this disclaimer, all information provided herein is subject to modification by the underlying protocol network.