tl;dr
Ethereum Foundation, led by Vitalik Buterin, is considering staking ETH themselves, despite historical reluctance due to regulatory and hard fork concerns. The Foundation currently sells ETH to cover expenses instead of staking. However, with declining staking rewards and ETH market share, staking m...
Ethereum Foundation, led by Vitalik Buterin, is considering staking ETH themselves, despite historical reluctance due to regulatory and hard fork concerns. The Foundation currently sells ETH to cover expenses instead of staking. However, with declining staking rewards and ETH market share, staking may become a more sustainable financial strategy.
According to Vitalik Buterin, the Ethereum Foundation is exploring ways to stake ETH themselves. The Foundation historically refused this practice due to two main difficulties, but it is now exploring ways to circumvent them. Buterin claimed that regulatory issues seem less likely than in the past, but the foundation doesn’t want to be forced to choose sides in a hard fork.
For Ethereum co-founder Vitalik Buterin, the staking issue is growing in salience. Yesterday, the Ethereum Foundation announced leadership reform in response to mounting community criticisms. One of the main arguments is that the foundation sells ETH tokens to cover expenses instead of staking them.
Instead of earning passive rewards for staking, the Ethereum Foundation uses its mainnet to swap ETH for stablecoins, and it uses those to pay people and run events. Considering that the foundation holds such a massive reserve of ETH, it seems like an attractive option. Unfortunately, Ethereum staking rewards have been declining in recent months. However, that’s not the only issue; ETH’s market share hit a 4-year low in mid-January, and it continues to underperform in the bull market due to reduced demand.
As far as Buterin’s concerns go, only one of them has been sufficiently answered. He was concerned that regulators might not approve of the EF directly conducting Ethereum staking, but Trump’s Presidency promises more industry collaboration. However, although a major Ethereum hard fork hasn’t happened in over a year, it’s always a possibility.
Nonetheless, the community has shown relief that leaders like Buterin are openly considering its viability. If Ethereum’s price and market dominance keep flagging, it may inspire a radical solution, but nothing is guaranteed.