# Anti-Correlation Penalties by Toni Wahrstätter | Devcon SEA

- Speakers: [Toni Wahrstätter](https://streameth.org/speakers/toni-wahrstatter)
- Channel: [Devcon](https://streameth.org/devcon)
- Date: 2025-10-07
- Duration: 09:36
- Watch: https://streameth.org/watch/yt-22pwgkdy2ic
- YouTube: https://www.youtube.com/watch?v=22pwgkdy2ic

## Description

Anti-Correlation Penalties is a proposal to allow the penalties for missed attestations to vary over slots, based on the number of missed attestations in the respective slots. This is great for non-correlated parties such as solo stakers and improves decentralization, fault tolerance and diversity in the validator set.

Speaker(s): Toni Wahrstätter
Skill level: Beginner
Track: Core Protocol
Keywords: Economics, penalties

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## Transcript

[Music] great thanks a lot to everyone who showed up here um to quickly introduce myself my name is Tony I do I'm doing research at the affirm foundation and today I want to talk about a topic I perceive as very very important um namely decentralization and to be more specific I want to talk about the topic of correlation penalties to get into the topic let me quickly describe the problem that we have today on this chart you can see the missed attestation rate um of different entities going from K EFI Lio the very professional entities on the on the left hand side two solo stakers kak and rockol um on the right hand side to be fair K is an outlier here so I think when I did this chart they just had some strugg but in the end the picture is quite clear solo stakers are struggling with um what the network demands from them and what this chart actually shows is the Mist attestation rate compared to the expected missed attestation rate based on the market share and if your bar is above zero this means you miss more attestations than expected and this is of course problematic because solo stakers um we might all agree are the most important entities in the ecosystem they are super important for various different properties and we should make sure that solo stakers remain competitive compared to all the large pools one thing that is also very evil and dangerous are economies of scale so what's what big pools can do they can just put many validators for example on one note and this allows them to lower their costs solo stakers cannot do that so if you are a solo Staker you might just have one validator and therefore you have one node you use one internet connection and you have to manage it yourself on the other hand the pools they can use economies of scale to make their operations more and more efficient right they can use one cloud provider use one internet connection and so on and in the end what we might um go towards to is a very centralized validator set and this is something that is very bad for and we should definitely try everything to avoid that the cool thing is so now getting into some positive vibes the cool thing on the right hand side is you cannot really leverage economies of scale without also creating correlations for example if you put four 4,000 5,000 keys on one machine there is a correlation how those validators behave in the end if your note goes offline then all of your 5,000 validators will be offline if your cloud provider has a problem then all of your keys might be affected and the same applies to all the other things that affect economies of scale so what we see on the right hand side I would say it's a um correlations and economies of scale should be um should have a very linear relation and now how can we actually leverage this knowledge leverage the knowledge that economies of scale might scale also the correlations um to the good for etherum and this brings me to an EAP that is still very young it's EAP um 7716 called anti-correlation attestation penalty and as you can see here um it's very young so the EAP is only a few months old um the original idea is from vitalic and deine and me hacked on the implementation at the eve Berlin hecon and now we are getting closer to final um not really finalizing but getting closer to finding ways how we can best introduce anti-correlation attestation penalties the high level idea is the following if many validators miss their attestations in the same slot we just scale the penalties up and vice versa if they if only a few validators miss an attestation we can lower the penalties so basically if you're running um all of your keys on one machine the machine goes offline then you might expect higher penalties and a solo Staker that goes offline should receive lower penalties and this is the goal of this EAP this is just an example how it would look like you would have many validators on one machine the machine goes offline the correlation will be high and so with the pen penalty be on the other hand side your resol sta you have one key on one machine the machine goes offline and the it should then affect your penalties by just lowering them finally let me quickly present some initi results so this is from empirical data it's approximately um um 6 months of data and what we can see is that the comparison between the pink bar and the gray bar and you can already see that only the small siiz clusters and the unidentified cluster um which both include many solar stakers they would profit from the whole thing so we can see solo stakers would have been penalized almost half what they were actually penalized whereas the big stakers like we saw earlier Lio ke eavi and so on they would receive higher penalties and in the end what we want to do is just create a leveling playing field for all these entities and allow solo stakers to finally also econ economically compete with the big guys that's all I have for this lightning talk um thanks a lot if you have any questions if you want to engage with the EIP we are still in draft stage so happy for any input on the EAP itself and yeah feel free to reach out if you have any questions all right it's very unfair to be a solo Saker right so uh could a withdrawal address be considered a correlation so like if a staking large staking pool used the same with contract address for a withdrawal address could that be considered a correlation um that's an interesting question so of course we always have to check what can the protocol actually see right the protocol can see um correlations because of Mis dations and also as you said the protocol might also be able to see withdrawal addresses I guess this is very easy to circumvent right we will basically create an incentive for the big guys to use multiple withdrawal addresses so this is very easy to circumvent whereas um correlations be that arise from running everything from a very centralized setup cannot really be circumvented H Tony thank you so much um can I kind of reduce my correlation by artificially kind of taking individual of my 10,000 validators offline selectively to make a pattern that is not correlated yeah you can and that's actually one of the goals of the EAP so for example if you're a big staking pool and you have thousands of keys running on a few machines what you can can do is basically split those keys up and put them on many different machines the cool thing is you lose economies of scale so it cost money you have to maybe manage more machines you have to diversify your setup and in the end you basically do exactly what we want you to do you diversify your whole setup and you um increase your fall tolerance okay yeah I mean if I'm um if I'm a non Staker but I want to put Ethan to a staking pool you're saying that I will be slashed disproportionate to my e so you're not in that case you're not penalizing you're penalizing people below solo stakers right people that don't that can't run the infra and I that's a that seems like a very large weakness here of uh possibly this proposal yeah I see your point um I would say it's the following so why would someone stake with a pool because it's because they offer a high enough um high enough profits for you right as soon as we force big pools as as soon as we lower the profits for big pools either by increasing the penalties or by forcing them to diversify the setup their um rates that they can offer they would also be reduced right so I would I would argue that this would create an incentive for someone who thinks thinks about maybe staking with a pool to yeah consider it again and maybe don't stake with a pool just because the incentives are not high enough right if they can't stick then for example what you could do is look into uh one of the entities like rockol that offers you to also stake with less than one Eve while still having a very anti-correlated setup okay guys time's up if you want to continue the the chat you can you can do it afterwards thank you very much Tony thank you