Vitalik Buterin Announces He’s Not Staking His Entire ETH, Only a ‘Small Part’

Ethereum co-founder Vitalik Buterin said he doesn’t stake all his ethereum (ETH) holdings due to the multisignature (multisig) wallet being “complex in many ways”.

on June 29 episode Bankless Podcast Title realignment, Buterin cited the “biggest reason” why he is staking only a small fraction of it instead of staking all of his Ethereum. he explained:

“Because if you stake your ETH, the keys to access it must be public on the online subsystem. For security, it has to be multisig, setting up multisig for staking is still quite difficult, it gets complicated in many ways.

Charles Hoskinson, co-founder of Ethereum and founder of Cardano (ADA), said on Twitter on June 30 that he was “out of words” after hearing that Buterin only staked a small fraction of his ether.

Hoskinson said that “everything” of his Cardano is at stake.

I had to listen to it several times. I have no words left. All our Ada is at stake. Guess that should be the case for a properly designed proof-of-stake protocol. https://t.co/ye6va1DH06

— Charles Hoskinson (@IOHK_Charles) 29 June 2023

Buterin also discussed the Eigenlayer protocol – a protocol that allows Ethereum validators and stakeholders to “re-stake” their assets on other emerging networks.

The challenge, he said, is that it creates a “centralization risk”:

“Trustworthy stakeholders will be given more importance by the system than untrustworthy stakeholders. Trusted stakeholders are much less likely to actually make the cut.”

Eigenlayer founder Shriram Kannan pointed out that there are “complex risks” with re-staking and that it is important to take a “restrained approach to building re-staking”.

“The constraints are building what’s really good for the ecosystem? And what new innovation can be driven based on this concept. Driving value is permissionless innovation,” he said.

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Buterin said in a June 9 blog that the Ethereum blockchain “fails” completely without sufficient scaling infrastructure to make transactions cheap.

He also said that another point of failure is related to the smart contract wallet. He pointed out that the move to smart contract wallets has presented some challenges due to complications on the user experience side, when users take control of multiple addresses at once.

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