Charles Hoskinson Slams Vitalik Buterin’s Staking Strategy: Full ADA Staked vs. Small ETH Stake

• Ethereum co-founder, Vitalik Buterin, is staking only a fraction of his Ether (ETH) due to the complexities of setting up multisig wallets.
• The up-and-coming EigenLayer protocol, which permits Ethereum validators and stakers to ‘re-stake’ their assets on other networks, presents centralization risks, according to Buterin.

As a figurehead in the blockchain industry, Ethereum’s co-founder, Vitalik Buterin, has piqued interest with his recent decision to only stake a portion of his Ether holdings. Buterin disclosed during the June 29th episode of the Bankless podcast that the primary reason behind this choice is the inherent complexity of multisignature wallets, which he labels as ‘complicated in a bunch of ways’. Multisig wallets, which necessitate multiple keys for transactions, are currently challenging to establish for staking purposes.

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Cardano founder Charles Hoskinson criticized Ethereum founder Vitalik Buterin for staking only a small portion of his ETH holdings, claiming that this shows a lack of trust in his own protocol.

— whalechart (@WhaleChart) July 2, 2023

Notably, this announcement has stirred reactions within the industry, with Charles Hoskinson, Ethereum’s co-founder and the founder of Cardano, expressing surprise on Twitter and pointing out that his entire Cardano holdings are staked.

Buterin’s conversation didn’t end there. He shed light on the impending EigenLayer protocol, a system that aims to empower Ethereum validators and stakers with the capacity to ‘re-stake’ their assets onto other emerging networks. This protocol, presently in its testnet phase and slated for launch in the third quarter of 2023, comes with its own set of challenges. Buterin highlighted that the protocol carries ‘centralization risks’ as it potentially places more value on ‘trustworthy stakers’, those less likely to get slashed.

Sreeram Kaanan, EigenLayer’s founder, acknowledged the ‘complex risks’ associated with restaking, emphasizing the necessity of a ‘constrained approach’ in developing the restaking concept. This approach will ensure that new innovations built on the concept will promote a healthy ecosystem.

Buterin’s revelations about the challenges associated with staking and restaking underscore the intricate nature of Ethereum’s evolving ecosystem. His prior assertions in a June 9 blog post underscored the importance of scaling infrastructure to prevent the Ethereum blockchain from failing due to high transaction costs. These complexities are further amplified with the transition to smart contract wallets, which can cause difficulties for users controlling multiple addresses.

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