Cardano (ADA) founder Charles Hoskinson tweeted on February 9 that Ethereum (ETH) staking is problematic.
We thought a lot about what makes sense for a sustainable, proof of stake protocol that promotes control by the many instead of the few and creates a large decentralized environment. Locking funds, encouraging centralization, and poor protocol design hurts the whole industry
Charles Hoskinson (@IOHK_Charles) February 9, 2023
According to Hoskinson, Ethereum’s staking looks like “very much like regulated products” because it involves “to temporarily give up your assets to someone else in order to… get a return.“He adds that:
“Locking up funds, encouraging centralization, and poor protocol design are hurting the industry as a whole.”
Charles Hoskinson was responding to Coinbase CEO Brian Armstrong’s statement that the SEC was considering banning retail access to staking.
Charles Hoskinson suggested that Cardano’s approach to staking “makes sense for a sustainable, proof-of-stake protocol that promotes control by the many instead of the few and creates a large decentralized environment.“
The U.S. Securities and Exchange Commission (SEC) has stepped up its regulatory oversight of the crypto-currency industry, initiating several proceedings against crypto-currency companies. Commission Chairman Gary Gensler has previously stated that crypto exchanges that offer staking services are offering similar services to loans, even with changes to the’labeling.
This comment prompted several heated responses from the crypto community about the Commission’s understanding of crypto staking. Hoskinson stated:
“All proof-of-stake protocols could be lumped together because of a fundamental misunderstanding of the actual facts of operation and design [du jalonnement].”
Meanwhile, this is not the first time Hoskinson has criticized Ethereum’s staking. The Cardano founder previously described the blockchain network as “the California hotel of crypto“.