Vitalik Buterin, the co-founder of Ethereum, recently clarified that he is staking only a “small portion” of his ETH holdings. During an episode of the Bankless podcast on June 29, Buterin explained that the primary reason for this decision is the security risks associated with staking. He mentioned that staked ETH requires public access keys, typically managed through a Multisig system, which can be challenging and complex to set up, a report in Cointelegraph said.
Buterin’s revelation prompted a response from Charles Hoskinson, co-founder of Ethereum and founder of Cardano. Hoskinson expressed his surprise on Twitter, stating that he is “at a loss for words” upon learning that Buterin stakes only a fraction of his Ether. In contrast, Hoskinson emphasized that he stakes all of his Cardano holdings.
During the podcast, Buterin also discussed the EigenLayer protocol, which enables Ethereum validators and stakers to re-stake their assets on emerging networks. Although the protocol is currently in its testnet phase and expected to launch in the third quarter of 2023, Buterin highlighted the challenge of centralization risks associated with it. He explained that the system would value trustworthy stakers more, as they would be less likely to face penalties.
Sreeram Kaanan, the founder of EigenLayer, echoed the complexity of restaking, emphasizing the need for a constrained approach to ensure ecosystem stability and foster new innovation.
This development follows Buterin’s previous statements in a blog post on June 9, where he asserted that the Ethereum blockchain lacks sufficient scaling infrastructure, resulting in high transaction costs. He also pointed out the challenges associated with user experience when dealing with smart contract wallets and managing multiple addresses simultaneously.
