Ethereum co-founder Vitalik Buterin stated that he is not staking all of his Ethereum (ETH) because multisig wallets are “complicated in many ways”.
On June 29 episode of the Bankless podcast called Re-alignment, Buterin revealed the “biggest reason” why he’s only staking a small fraction of his Ethereum, as opposed to staking all of it. He explained:
“Because if you stake your ETH, the keys that access it must be public in the subsystem that is online. It has to be Multisig for safety, Multisig for staking is still quite difficult to set up, it gets complicated in many ways.”
Charles Hoskinson, co-founder of Ethereum and founder of Cardano (ADA) tweeted on June 30 that he was “at a loss for words” after hearing Buterin stake only a small portion of his ether.
Hoskinson added that “all” of his Cardano is staked.
I had to listen to it a few times. I’m just at a loss for words. Our whole Ada is at stake. Guess how it should be for a properly designed Proof of Stake protocol. https://t.co/ye6va1DH06
— Charles Hoskinson (@IOHK_Charles) June 29, 2023
Buterin too discussed the EigenLayer protocol – a protocol that allows Ethereum validators and stakers to “re-stake” their assets into other emerging networks.
He said the challenge was that it created “risks of centralization”, stating:
“Trusted stakers would be valued more by the system than untrusted stakers. Trusted stakers are much less likely to actually get undercut.”
Sreeram Kaanan, founder of EigenLayer, explained that there are “complex risks” with re-staking and it’s important to take a “restrained approach when restaking builds”.
“Constraints are what’s really good for the ecosystem? And constraints on building new innovations that can be loosened based on this concept. The driver is permissionless innovation,” he said.
This comes after Buterin said in a June 9 blog post that Ethereum blockchain directly it will “fail” without enough scaling infrastructure to make transactions cheap.
He also noted that another point of failure relates to smart contract wallets.
He explained that the transition to smart contract wallets has led to some issues arising from the complexity associated with the user experience when users take control of multiple addresses at once.