Ethereum co-founder warns of potential theft of over $40 billion in staked ETH.
It seems that Vitalik Buterin, the co-founder of Ethereum, has concerns about the security of the infrastructure for ETH staking. In a recent interview, Buterin mentioned that he would only stake a limited amount of coins to ensure that the network is distributed and resistant to malicious agents who may attempt to take control of the platform and reverse transactions.
Vitalik Buterin Has Doubts On Ethereum Staking
Buterin has raised concerns about the potential risks of ETH staking through third-party infrastructure, particularly regarding the exposure of private keys and the risk it poses to his entire stake. He believes that implementing a multi-signature system could provide better protection. However, the current process is more difficult to set up, leading to his increased caution.
In a multi-sig system, users have their private key to sign transactions. A specific number of signatures must be provided to approve a transaction, which varies based on the Ethereum wallet’s configuration. This setup enhances security and reduces the risk of unauthorized access to funds.
During the Bankless Podcast, the co-founder explains:
Probably the biggest reason why I personally am not just staking all of my ETH, that I’m instead staking a fairly small portion, is because if you stake your ETH, it has to be all out, like the keys that access it have to be public on some system that’s online, and for safety, it has to be a multi-sig, and multi-sigs for staking are still fairly difficult to set up, and it gets complicated in a bunch of ways.
ETH Prices Stable Below $2,000
His remarks have generated a lot of discussion. Most critics are concerned about the overall security framework of Ethereum. After transitioning from a proof-of-work to a proof-of-stake system, Ethereum relies on a network of validators who must stake at least 32 ETH to have a chance to approve a block of transactions and earn block rewards and transaction fees. These validators are also crucial for securing the network; without them, the blockchain will be vulnerable to attacks.
According to on-chain data, there are over 643,000 validators spread across the globe who have staked over 20.5 million ETH. On average, each validator has staked 32.17 ETH. Notably, the number of validators has steadily increased over the years, and the amount of ETH staked has significantly risen despite the recent upgrade that allows stakers to unlock their coins.
Charles Hoskinson, the founder of Cardano and one of the original co-founders of Ethereum, expressed being “lost for words,” clarifying that all their ADA is staked as expected in a “properly designed proof-of-stake system.”
At the time of writing, ETH prices remain stable and were not affected by Buterin’s comments. However, the coin has yet to surpass $2,000 and is trending below the highs of April 2023 in early July 2023.