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Vitalik Buterin declares he is not staking all of his ETH, merely a ‘small portion’

July 2, 2023 Coin Telegraph

Coin Telegraph

Ethereum co-founder Vitalik Buterin explained the “biggest reason” is because it has to be on a multisig – which are still “fairly difficult” to set up.

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.”

*Vitalik Buterin speaking on the Bankless Podcast on June 29. Source: Bankless Podcast*

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 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.

*Panellists on the June 29 Bankless Podcast episode. Source: Bankless Podcast*

This comes after Buterin stated in a June 9 blog that the Ethereum blockchain outright “fails” without sufficient scaling infrastructure to make transactions cheap.

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Ethereum ‘re-staking’ protocol EigenLayer launches on testnet

April 7, 2023 Coin Telegraph

Coin Telegraph

The re-staking collective aims to address Ethereum validator economic incentives.

A new protocol that allows Ethereum validators and stakers to “re-stake” their assets onto other emerging networks has just launched on testnet.

The mainnet launch of the EigenLayer protocol is not expected until Q3, however, and testing will be phased in three stages to onboard various participants into the ecosystem. The first stage is using Ethereum’s Goerli testing network.

The project has some serious backing and announced $50 million in a Series A funding round in late March led by crypto venture firm Blockchain Capital, along with Coinbase Ventures, Polychain Capital, Electric Capital and Finality Capital Partner.

EigenLayer aims to become a decentralized marketplace for Ethereum node operators and validators to earn fees on additional services. It allows them to restake assets they received in exchange for staking Ether on platforms such as Lido (stETH) and RocketPool (rETH). The assets can be reused to validate and secure other networks, such as sidechains or non-EVM blockchains.

According to the white paper, EigenLayer also has plans to enable restaking for ETH withdrawn from the Beacon Chain following the Shapella upgrade.

“Ethereum validators can set their beacon chain withdrawal credentials to the EigenLayer smart contracts, and opt-in to new modules built on EigenLayer.”

The protocol aims to address issues with validator economic incentives. EigenLayer founder Sreeram Kannan said that facilitating the moving and re-staking of ETH onto other networks would incentivize validators and stakers with additional yields and allow smaller networks to grow securely.

We are excited to announce the release of the testnet for the first stage of the EigenLayer protocol, which supports liquid and native restaking.

Please read the full details here: https://t.co/1eoriZOcwo

1/8 pic.twitter.com/xLs3CC2EOK
— EigenLayer (@eigenlayer) April 6, 2023

In late March, Ethereum co-founder Joseph Lubin said that “[t]he Eigen Labs team is at the forefront of some of the most exciting work happening in Ethereum.”

“Eigenlayer is a new paradigm for fostering protocol-centric innovation through a programmatic, decentralized trust marketplace,” he added. High praise, but it’s worth noting that Lubin’s Ethereal Ventures fund has invested in EigenLayer.

There are currently 17.9 million ETH staked on the Beacon Chain, according to the Ultrasound.Money tracker. At current prices, this is valued at around $33.6 billion, which is more than the entire market capitalization of USDC. It represents almost 15% of the entire Ethereum supply.

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