Vitalik Buterin not comfortable in staking his entire ETH

Ethereum co-founder, Vitalik Buterin, recently shared valuable insights into his decision to stake only a small portion of his Ether (ETH) holdings. In an episode of the Bankless podcast on June 29, Buterin highlighted the challenges associated with multisignature (multisig) wallets, which contribute to his cautious approach to staking.

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“Because if you stake your ETH, the keys that access it have to be public on a subsystem that is online. For safety, it has to be a Multisig. Multisig for staking is still fairly difficult to set up; it gets complicated in a bunch of ways.”

During the podcast, Buterin also touched upon the EigenLayer protocol, an upcoming innovation that allows Ethereum validators and stakers to transfer their assets to emerging networks. While the protocol is still in its testnet phase and expected to launch in the third quarter of 2023, Buterin cautioned about potential centralization risks. He emphasized that the system would value trustworthy stakers more than their untrustworthy counterparts, reducing the likelihood of slashing incidents.

This comes after Vitalik Buterin in a June 9 blog post, expressed concerns about the Ethereum blockchain’s scalability, stating that it “fails” without sufficient scaling infrastructure to facilitate affordable transactions. Buterin’s remarks underline the critical need for scalable solutions to support the long-term viability and success of the Ethereum network.

Sreeram Kaanan, the founder of EigenLayer, recently emphasized the presence of complex risks associated with restaking and stressed the need for a constrained approach in building restaking mechanisms. Kaanan highlighted the importance of imposing constraints to foster ecosystem growth and unlock new innovations within this framework.

Charles Hoskinson, the co-founder of Ethereum and founder of Cardano, took to Twitter on June 30, stating “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. after hearing Buterin only stakes a small portion of his Ether.

By staking only a fraction of his ETH holdings, Buterin ignites fears in the crypto community about possible future of Ethereum. As a prominent figure in the crypto space, his insights shed light on the intricacies of securing and managing Ethereum assets while exploring the possibilities offered by emerging protocols like EigenLayer.

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