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Charles Hoskinson is not a big fan of Ethereum staking. Hoskinson is usually an outspoken crypto founder who is known to provide insight into the community from time to time.
This time, the founders of Cardano are making it clear that staking digital currencies on the Ethereum blockchain brings myriad problems and downsides for stakeholders. He is also tired of slashing and bonds. As for non-custodial liquid staking, Hoskinson believes it is not a new concept.
“Ethereum staking is problematic. Temporarily staking your assets to get returns feels a lot like regulated products. Slashing and bonds aren’t so good. Non-custodial liquid staking, on the other hand, is like a mining pool Which we’ve used for 13 years,” Hoskinson wrote in a recent tweet.
He further ironically points out that although Ethereum is a proof of stake protocol as it strives to become more sustainable, it still promotes control by the majority rather than the few. They say that locking up funds and encouraging centralization and poor protocol design harm the entire industry.
He decisively shares his disappointment, as he notes that all proof-of-stake protocols could end tragically for gaining a bad reputation. He believes that they can all be “stacked together” because of their lack of fundamental understanding of operational facts and design. “It’s like comparing Three Mile Island to a modern fourth generation nuclear reactor because they both use the word fission.” He added.
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His tweet was a reply to Coinbase CEO Bren Armstrong. Armstrong recently revealed in a series of tweets that there are rumors that the SEC intends to eliminate cryptocurrency staking in the United States for retail customers. Armstrong hopes the rumors are not true, as he says it would be a “terrible path” for the US if it goes through with the said plans.
In a view contrary to Charles Hoskinson, Brian Armstrong is certain that staking is a necessary innovation in the cryptocurrency ecosystem. He added that staking gives users the ability to directly participate in running an open crypto network. Armstrong commented that staking also allows for scalability, increased security and reduced carbon footprints.
4/ We need to make sure new technologies are encouraged to develop in the US, not stifled by a lack of clear regulations. When it comes to financial services and Web3, it is a matter of national security to build these capabilities in the US
— Brian Armstrong (@brian_armstrong) February 8, 2023
He insists that regulation through enforcement from the SEC will fail. Citing FTX as an example, he believes regulation by enforcement will force companies to move offshore.
