Ethereum co-founder Vitalik Buterin stated that he does not stake all of his Ethereum (ETH) due to multisignature (multisig) wallets being “complicated in a bunch of ways.”
On the 29 June episode of the Bankless Podcast, titled Restaking Alignment, Buterin revealed the “biggest reason” why he is only staking a small fraction of his Ethereum, as opposed to staking the entirety of it. He explained:
“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.”
Charles Hoskinson, the co-founder of Ethereum and founder of Cardano (ADA) took to Twitter on June 30 stating he is “at a loss for words” after hearing Buterin only stakes a small portion of his Ether.
Hoskinson added that “all” of his Cardano is staked.
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. https://t.co/ye6va1DH06
— Charles Hoskinson (@IOHK_Charles) June 29, 2023
Buterin also discussed the EigenLayer protocol – a protocol that allows Ethereum validators and stakers to “re-stake” their assets onto other emerging networks.
He said the challenge is that it creates “centralization risks,” stating:
“Trustworthy stakers would be valued more by the system than untrustworthy stakers. Trustworthy stakers are much less likely to actually get slashed.”
Sreeram Kaanan, founder of EigenLayer, explained there are “complex risks” with re-staking and it is important to take a “constrained approach in building restaking.”
“Constraints being what is really good for the ecosystem? And having constraints on building what new innovation can be unleashed based on this concept. The driving value is permissionless innovation” he stated.
Related: Vitalik Buterin and Polygon co-founder to help send $100M toward COVID-19 research
This comes after Buterin stated in a June 9 blog that the Ethereum blockchain outright “fails” without sufficient scaling infrastructure to make transactions cheap.
He also noted another point of failure relates to smart contract wallets.
He explained that a move to smart contract wallets has resulted in certain challenges arising due to the complexities associated with the user experience side of things when users take control of multiple addresses at once.