How Does the Transition of Ethereum to a Full PoS System Impact Its Finality?
Ethereum's transition to a full Proof-of-Stake (PoS) system, known as The Merge, introduced absolute, faster finality via the Casper FFG mechanism on the Beacon Chain. Unlike the previous probabilistic finality of PoW, a block confirmed by a 2/3 supermajority of staked Ether cannot be reverted without the attacker losing their stake (slashing).
This greatly enhances security, certainty, and reduces the risk of deep chain reorganizations.
Glossar
Probabilistic Finality
Certainty ⎊ Probabilistic finality within cryptocurrency and derivatives represents a quantified assessment of settlement irreversibility, diverging from traditional absolute finality models.
Staked Ether
Definition ⎊ Staked Ether refers to the amount of Ether locked within the Ethereum Proof-of-Stake consensus mechanism, representing capital dedicated to network validation and security, which is typically illiquid in its native form.
PoS System
Architecture ⎊ This consensus mechanism relies on a set of validators who lock up a quantity of the native cryptocurrency as collateral to gain the right to propose and attest to new blocks on the chain.
Faster Finality
Determinacy ⎊ Faster Finality, within cryptocurrency and derivative markets, signifies a reduction in the probabilistic nature of transaction settlement, moving towards assured state confirmation.
Casper FFG
Framework ⎊ Casper FFG, or the Friendly Finality Gadget, represents a foundational component in Ethereum's transition to a Proof of Stake consensus mechanism.
PoS Consensus
Attestation ⎊ The Proof-of-Stake (PoS) consensus mechanism fundamentally relies on attestation, a process wherein validators, selected based on staked assets and other criteria, vouch for the validity of new blocks.