Staking Services a Serious Risk to Earning Passive Ethereum

ETH

After DeFi, Ethereum users are stocking up on Ether in hopes of earning passive returns via staking. But as exchanges and staking services emerge, these easy payoffs come with a serious cost.

Major Risks to Staking Ethereum

Ethereum’s most promising upgrade has been delayed once again despite promises of a summer release. But even after Phase 0 takes flight, enthusiasts will likely need to wait a few more years before earning passive income on their holdings.

In the meantime, Brian Crain, a founder of Chorus One, a blockchain-as-a-service that runs validators for roughly ten staking networks, has a few words of caution.

“Proof of stake networks were not designed with the idea that exchanges would start offering staking services,” said Crain in an interview with Crypto Briefing. “Their inclusion in such networks poses serious challenges.”

Crain and the Chorus One team released an 81-page report last month outlining these serious challenges. However, for anyone who lives and breathes crypto, events in 2020 have already revealed the bulk of the danger.

When big exchanges like Binance, Coinbase, KuCoin, and others began offering staking services, users were relieved. Instead of setting up sophisticated blockchain hardware and ensuring nodes are operating correctly, they could hand off this responsibility to exchanges.

Unfortunately, this convenience comes with a cost, evidenced by a battle for control between Steemit’s community and the founder of Tron, Justin Sun.

Read More

Ledger Nano X - The secure hardware wallet

Like what you're reading? Please share it...

Share on facebook
Share on twitter
Share on linkedin
Share on pinterest
Share on telegram
Share on reddit
Share on email
Share on vk
Share on tumblr

When I came up with Ethereum, my first first thought was, 'Okay, this thing is too good to be true.' As it turned out, the core Ethereum idea was good - fundamentally, completely sound