Vitalik Buterin, the co-creator of Ethereum, recently shed light on why he doesn’t stake his entire Ether (ETH) holdings, pointing towards the complexity of setting up multisignature (multisig) wallets.

During the Bankless podcast episode on June 29, Buterin unveiled the primary reason behind staking only a small amount of his ETH. He noted that the public keys required to access staked ETH need to be present in an online subsystem, mandating the need for a multisig for security purposes. However, he explained that establishing a multisig for staking can be quite complex.

The revelation prompted a response from Charles Hoskinson, Ethereum’s co-founder and Cardano’s founder, who expressed his surprise on Twitter on June 30. He noted his puzzlement at hearing that Buterin stakes only a small part of his Ether while he stakes all of his Cardano ADA.

In the same conversation, Buterin also touched upon the EigenLayer protocol. This innovative protocol allows Ethereum validators and stakers to “re-stake” their assets onto other burgeoning networks.

Though currently in the testnet phase and not slated for launch until the third quarter of 2023, Buterin pointed out that it poses “centralization risks”. He explained that the system is likely to value reliable stakers more than unreliable ones, leading to a lower likelihood of the former being slashed.

Sreeram Kaanan, the mastermind behind EigenLayer, acknowledged the “complex risks” involved with restaking and emphasized the need for a “constrained approach” in its development. He reiterated that any innovation should align with the ecosystem’s wellbeing and consider potential opportunities based on this concept.

Buterin’s comments follow his June 9 blog post, where he starkly claimed that Ethereum would “fail” without a robust scaling infrastructure to ensure affordable transactions. He also pinpointed another potential failure point connected with smart contract wallets. He elaborated on the challenges that arise from user experience complexities when users handle multiple addresses simultaneously, all stemming from the transition to smart contract wallets.