Advertisement
AD

Main navigation

Cardano CEO Says Ethereum Staking Is Problematic, Here's Why

Advertisement
Thu, 9/02/2023 - 8:29
Cardano CEO Says Ethereum Staking Is Problematic, Here's Why
Cover image via www.youtube.com

Disclaimer: The opinions expressed by our writers are their own and do not represent the views of U.Today. The financial and market information provided on U.Today is intended for informational purposes only. U.Today is not liable for any financial losses incurred while trading cryptocurrencies. Conduct your own research by contacting financial experts before making any investment decisions. We believe that all content is accurate as of the date of publication, but certain offers mentioned may no longer be available.

Read U.TODAY on
Google News

With the growing rumor that the United States Securities and Exchange Commission (SEC) is planning to ban crypto staking services, expert, including Cardano founder Charles Hoskinson, have shared their stance on the matter. Hoskinson believes one of the prominent protocols in the industry, Ethereum, offers what he named problematic staking.

Advertisement

The rumor was first broken by Coinbase CEO Brian Armstrong on the premise that users' staking rewards when they lock their cryptocurrencies looks a lot more like dividends paid out to security token holders.

For Hoskinson, the absolute inaccessibility of Ethereum tokens locked in staking smart contracts makes them look like regulated products.

“Ethereum staking is problematic. Temporarily giving up your assets to someone else to have them get a return looks a lot like regulated products. Slashing and bonds not so good. Non-custodial liquid staking on the other hand is like the mining pools we've used for 13 years,” he said in a tweet responding to Armstrong’s first post.

According to the Cardano boss, his team approached the subject of staking on the protocol to a model one that is mostly controlled by the community instead of a few users.

Related
Cardano (ADA), Tezos (XTZ) Staking Enabled by Digital Bank Revolut: Details

Bad twist for industry

While the news is still tagged as a rumor, industry participants are notably gearing up for an actual ban by the market regulator. According to Hoskinson, the "fundamental misunderstanding about the actual facts of operation and design" will make the SEC categorize all staking products as one and the same irrespective of their differences.

He believes designing a centralized system instead of a decentralized one, as most staking protocols have done, is billed to hurt the industry. With the SEC empowered to regulate crypto pending a regulatory change in the U.S., the commission has brought a lot of enforcement actions against several companies, including Ripple Labs Inc and LBRY.

Advertisement
TopCryptoNewsinYourMailbox
TopCryptoNewsinYourMailbox
Advertisement

Latest Press Releases

Our social media
There's a lot to see there, too

Popular articles