Vitalik Buterin, the renowned co-founder of Ethereum, has expressed hesitancy when it comes to staking a significant portion of his Ether holdings.
Staking, which involves participating in a proof-of-stake (PoS) blockchain network, requires holding and “staking” a certain amount of cryptocurrency as collateral to contribute to network operations and earn rewards.
In a recent interview with the Bankless Podcast, Vitalik Buterin shared his concerns regarding the existing infrastructure supporting this crucial staking service.
Despite his notable contributions to the blockchain industry and his extensive involvement with Ethereum, Buterin remains cautious about staking a large part of his ETH trove, emphasizing the importance of security in this decision.
Vitalik Buterin: Reservation And Security Concerns
Instead of staking all of his Ethereum, Buterin currently only stakes a relatively small portion. The main issue, as he explained, lies in the complexities associated with the setup required for secure staking.
The fundamental obstacle that deters Buterin from staking his entire ETH trove is the need for the staked funds to be accessible online with public keys and safeguarded by a multi-signature (multi-sig) system. However, he pointed out that configuring multi-sigs for staking purposes remains a challenging task in the existing infrastructure.
I had to listen to this a few times. I’m just at a loss for words. All of our Ada is staked. Guess what that’s how it’s supposed to be for a properly designed Proof of Stake protocol. https://t.co/ye6va1DH06
— Charles Hoskinson (@IOHK_Charles) June 29, 2023
Following the interview, Charles Hoskinson, who co-founded Ethereum alongside Buterin and is the founder of Cardano, took to Twitter to express his surprise at Buterin’s cautious approach to staking. Hoskinson asserted that he has no reservations and confidently disclosed that he stakes “all” of his Cardano (ADA) holdings.
Vitalik Buterin On EigenLayer Protocol’s Promise
Buterin also highlighted the promising potential of the EigenLayer protocol, emphasizing its capability to facilitate Ethereum validators and stakeholders in “re-staking” their assets onto emerging networks. This approach could provide a means to further decentralize the ecosystem and encourage greater participation from validators, bolstering the network’s security and efficiency.
Ethereum nearly unchanged at $1,954 on the daily chart: TradingView.com
While acknowledging the potential benefits of the EigenLayer protocol, Buterin also brought attention to the centralization risks it may entail. He emphasized that the system could value trustworthy stakes more than untrustworthy ones, raising concerns about the concentration of power in the hands of a few participants.
However, he also noted that trustworthy stakes are less likely to face the risk of being slashed, providing an incentive for participants to act responsibly and maintain the network’s integrity.
Vitalik Buterin pointed out the importance of balancing constraints in the ecosystem. While the EigenLayer protocol offers exciting possibilities, he emphasized the necessity of considering what is truly beneficial for the broader blockchain ecosystem.
Striking the right balance between encouraging innovation and ensuring the network’s stability is crucial to fostering sustainable growth and development.
Featured image from Bitpanda Blog
