Ethereum co-founder Vitalik Buterin recently shared his reasons for not staking all of his Ethereum (ETH) holdings, citing the complexities surrounding multisignature (multisig) wallets as the ‘biggest reason.’ Speaking on the Bankless Podcast on June 29, Buterin explained that staking ETH requires public access to the keys through a subsystem online, necessitating the use of multisig wallets. However, setting up multisig wallets for staking still poses challenges.
The revelation led Charles Hoskinson, co-founder of Ethereum and founder of Cardano (ADA), to express surprise on Twitter. Hoskinson stated that all of his Cardano is staked, emphasizing the importance of properly designed Proof-of-Stake protocols.
Buterin’s Discussion on EigenLayer Protocol
Buterin also discussed the EigenLayer protocol, which enables Ethereum validators and stakers to re-stake their assets on emerging networks. However, he pointed out that this approach carries centralization risks. Under this protocol, trustworthy stakers would be valued more by the system than untrustworthy ones, reducing the likelihood of getting slashed.
Sreeram Kaanan, the founder of EigenLayer, highlighted the complex risks associated with re-staking and emphasized the need for a constrained approach in its implementation. He emphasized the importance of determining what is beneficial for the ecosystem and how constraints can unleash new innovations while ensuring permissionless innovation remains a driving value.
This development follows Buterin’s previous statement in a June 9 blog post, where he expressed that the Ethereum blockchain fails without adequate scaling infrastructure to enable cost-effective transactions.