According to Vitalik Buterin, the Ethereum Foundation is studying ways to bet on ETH itself. The Foundation has historically refused this practice due to two main difficulties, but it is now studying ways to get around them.
Buterin said 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.
Will EF start staking Ethereum?
For Vitalik Buterin, co-founder of Ethereum, the issue of staking is becoming increasingly important. Yesterday, the Ethereum Foundation announced a reform of its leadership in response to growing criticism from the community.
One of the main arguments is that the foundation sells ETH tokens to cover expenses instead of staking them. Buterin explained these choices and possible changes on X (formerly Twitter).
“Historically, the concerns have been (1) regulatory, (2) if the Ethereum Foundation puts us on the line, that de facto requires us to take a position on any future controversial hard fork. The first concern is less than before, but the second remains. There are certainly ways to minimize this concern, and we have recently explored them,” Buterin said.
In other words, the foundation has not directly participated in Ethereum staking, even though it is a growing sector of the market. Instead of earning passive rewards for staking, the Ethereum Foundation uses its mainnet to exchange ETH for stablecoins, and it uses them to pay people and host events.
Given that the foundation holds such a massive reserve of ETH, this seems like an attractive option.
Unfortunately, Ethereum staking rewards have declined in recent months. However, this is not the only problem; ETH market share hit a 4-year low in mid-January and continues to underperform in the bull market due to declining demand.
In these bearish market conditions, staking rewards could provide a more sustainable method to cover these daily operational expenses.
As for Buterin’s two main concerns, only one of them has been adequately answered. He was concerned that regulators would not approve of the FE directly staking Ethereum, but the Trump presidency promises greater collaboration with the industry.
However, even though a major Ethereum hard fork hasn’t happened in over a year, it’s still a possibility. In other words, the foundation is investigating the question of Ethereum staking, but no simple answer is yet apparent.
Still, the community was relieved that leaders like Buterin were openly considering its viability. If Ethereum’s price and market dominance continue to falter, it could inspire a radical solution, but nothing is guaranteed.
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