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.
Will the EF Start Staking Ethereum?
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. Buterin explained these choices and possible changes on X (formerly Twitter).
“The concerns historically were (1) regulatory, (2) if Ethereum Foundation stakes ourselves, this de-facto forces us to take a position on any future contentious hard fork. The first concern is less than before, but the second one remains. There’s definitely ways to minimize this concern, and we’re recently been exploring them,” Buterin claimed.
In other words, the foundation has not directly taken part in Ethereum staking, even though it’s a growing sector of the market. 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.
Under these bearish market conditions, staking rewards might be a more sustainable method of covering these everyday operational expenses.
Ethereum Staking Flows since 2023. Source: Dune
As far as Buterin’s two main 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. In other words, the foundation is exploring the Ethereum staking issue, but no easy answers are apparent yet.
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.
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