Ethereum creator Vitalik Buterin believes staked Ether is at risk of being stolen


  • Buterin shared his thoughts on how multisig wallets work and disclosed the biggest reason why he is staking only a small fraction of his Ether.
  • According to the Ethereum co-founder Buterin, multisig for staking is fairly difficult and it is required for the safety of staked Ether. 
  • Cardano founder Charles Hoskinson stakes all his ADA holdings and expressed his surprise at Buterin’s statement. 

Ethereum co-founder Vitalik Buterin believes the safety of funds secured using multisig is “fairly complicated.” Buterin commented on Ethereum staking in the June 29 episode of the Bankless podcast. 

The Ethereum creator stakes a percentage of his Ether holdings, in contrast to Cardano founder Charles Hoskinson who stakes all his ADA. 

Also read: Kraken ready to disclose user transaction records to the Internal Revenue Services, exchange tokens take a hit

Ethereum co-founder stakes only part of his Ether for this reason

Founder of the second-largest cryptocurrency project said on a podcast that he is only staking “a small fraction of his ETH.” The Ethereum creator explained his reasons for the same, highlighting how multisig wallets need to be used to secure Ether staked in the deposit contract and the keys that access it have to be public on a subsystem online.

These layers of complexity imply it is not entirely safe to stake all Ether holdings in the staking contract. Buterin was quoted as saying:

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.

The Ethereum co-founder’s comments shook the crypto community and competitors in the ecosystem, like Cardano’s Charles Hoskinson expressed his surprise at Buterin’s statement.

Hoskinson told his 981,100 followers that all his ADA holdings are staked, unlike Buterin.

Nearly a month ago Buterin had commented on the dangers of overloading the Ethereum consensus layer. The Ethereum co-founder warned the crypto community in a lengthy blog post and shed light on high systemic risks to the ecosystem.


Like this article? Help us with some feedback by answering this survey:


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended Content

Editors’ Picks

Bitcoin: Retraces to around $75,000 after hitting new all-time high

Bitcoin: Retraces to around $75,000 after hitting new all-time high

Bitcoin (BTC) edges slightly down on Thursday and trades at around $74,900 after hitting a new all-time high (ATH) of $76,400 on Wednesday, buoyed by the victory of the crypto-friendly candidate Donald Trump in the US presidential election.

More Bitcoin News
Ethereum price jump spurs most significant ETF inflows in six weeks

Ethereum price jump spurs most significant ETF inflows in six weeks

​After a positive momentum in crypto markets following the outcome of the US presidential election, spot Ether exchange-traded funds (ETFs) in the United States saw their highest inflows in six weeks.

More Ethereum News
Top trending meme coins PEPE, BONK, and FLOKI achieve double-digit gains following Trump’s victory

Top trending meme coins PEPE, BONK, and FLOKI achieve double-digit gains following Trump’s victory

The prices of top trending meme coins Pepe (PEPE), Bonk (BONK) and FLOKI (FLOKI) experienced double-digit gains following Trump’s victory on Wednesday. The technical outlook suggests that the three meme coins hover around key levels, and the breakout could push these coins higher.

More Crypto News
SUI hits new all-time high fueled by Trump election win

SUI hits new all-time high fueled by Trump election win

Sui (SUI) edges down on Thursday and trades at around $2.24 after hitting a new all-time high (ATH) of $2.38 earlier in the day, buoyed by the victory of a crypto-friendly candidate, Donald Trump, in the US presidential election.

More SUI News
Bitcoin: New all-time high at $78,900 looks feasible

Bitcoin: New all-time high at $78,900 looks feasible

Bitcoin price declines over 2% this week, but the bounce from a key technical level on the weekly chart signals chances of hitting a new all-time high in the short term. US spot Bitcoin ETFs posted $596 million in inflows until Thursday despite the increased profit-taking activity.

Read full analysis
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

BTC

ETH

XRP