Adam Cochran, a crypto analyst, is urging Coinbase, the largest cryptocurrency exchange in the United States by trading volume, to prioritize the creation of an insurance fund for its users rather than focusing on diversifying its Ethereum client infrastructure.
Coinbase Should, Most Importantly, Have An Insurance Fund
In a post on X, Cochran thinks the exchange’s current approach to Ethereum client diversity is “inadequate.” Instead, the analyst recommends that Coinbase focus on mitigating the risks associated with Ethereum’s potential “supermajority” failure.
Ethereum is a leading smart contracts platform, allowing users to transact and developers to deploy smart contracts powering apps, some with billions in total value locked (TVL). However, Ethereum’s leading node operators at the backend rely on Geth, a validator client.
Data shows that the client is used by over 75% of all node operators. Through the open-source software, Ethereum remains up-to-date, and users can access funds and more. Besides Geth, there are options, including Besu and Nethermind.
The analyst pointed out that a “supermajority” failure, in which most Ethereum nodes simultaneously fail, could lead to significant disruptions and losses for Coinbase users. The “supermajority” failure, as the analyst points out, is if Geth fails, a possibility that would halt the operation of the network, even leading to a split. Cochran prioritizes creating an insurance fund or allowing users
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Author: Dalmas Ngetich
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