Key Takeaways:
- Vitalik Buterin shared his views on the risks that come with restaking.
- The Ethereum founder also shared concerns about overcomplicating the network’s consensus mechanism.
NEW DELHI (CoinChapter.com) — Ethereum founder Vitalik Buterin believes restaking and other such ventures might overcomplicate the platform’s consensus mechanism. In particular, Buterin expressed concerns about ETH restaking.
Restaking allows users to stake assets they receive in exchange for staking ETH on platforms like Lido. In a blog post, the Ethereum founder shared his concerns, highlighting several use cases that could risk the Ethereum network, including restaking.
Buterin clarified that he was fine with the “dual-use of validator staked ETH,” but to use Ethereum’s social consensus for another application might invite trouble.
For example, Buterin noted a scenario where eCash switched to proof of stake and allowed users to duel stake. However, the protocol expects Ethereum to undergo a hard fork if validators decide to harm the protocol.
While it might sound good, Ethereum has multiple L2 blockchains running on top of it. As a result, if a number of them face problems, the Ethereum ecosystem would be split into multiple chains due to the hard forks.
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Furthermore, Buterin highlighted that global political events could also force a hard fork in the chain. The Ethereum founder cited a possible scenario where political interest in Brazil led to the creation of two CBDCs on different chains.
As soon as a blockchain tries to “hook in” to the outside world, the outside world’s conflicts start to impact on the blockchain too
Buterin noted
Moreover, re-staking, even in low-risk situations, might culminate in a situation that compromises the Ethereum main net’s security.
Incidentally, restaking protocol Eigen Layer’s founder Sreeram Kannan welcomed Buterin’s thoughts, calling the post an “excellent analysis of the different kinds of risks” involved in restaking.
ETH Price Continues To Consolidate
Meanwhile, ETH price has been consolidating above $1,800 as bulls aggressively defend the 100-day EMA (blue wave) support level near $1,770. Moreover, the lack of volatility in Ethereum’s price action indicates indecision amongst market participants.
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ETH price faces trouble breaking above the 20-day EMA (red wave) and 50-day EMA (purple wave) resistance confluence. However, needling above the confluence resistance might help the Ethereum token price rally to $1,870.
Breaking and consolidating above the immediate resistance level could see ETH price challenge resistance near $1,970 before downside corrections pare gains.
Conversely, a breakdown from the consolidation level might result in the ETH price dropping to its 100-day EMA support level. Breaching the immediate support level could result in the Ethereum token price testing support near $1,680 before recovering.
The RSI for ETH remained neutral, clocking at 45.69 on the daily charts.
