Founder of Cardano ($ADA) Says Ethereum ($ETH) Is “Becoming the Hotel California of Crypto”
On Friday (September 16), Charles Hoskinson, who is the co-founder and CEO of Input Output Global (“IOG”), the blockchain technology company behind Cardano’s R&D, expressed his disappointment with Ethereum’s staking model.
It all started on Thursday (September 15th), when a Cardano fan pointed out that Kraken has recently told its users that $ETH unstaking will not be available until Ethereum has its Shanghai protocol upgrade, which is expected sometime next year.
Hoskinson then sent out a tweet mocking Ethereum’s proof-of-stake (PoS) model by subtly noting that Cardano’s PoS design and implementation does not suffer from this problem:
IOG explained Cardano’s “liquid staking” feature in a blog post published on July 28, 2022:
“A term you may have come across is “liquid staking”. This refers to a problem with some other blockchains where the stake associated with a cryptocurrency is “locked” by the staking process, so it cannot be used for other purposes, such as voting. This is not a problem with Cardano; the bet is always liquid. There is also no “lock-in” period before a bet becomes active, or which can delay a coin being spent or otherwise used.“
Before Ethereum’s Merge upgrade took place on the mainnet on September 15, the Ethereum Foundation noted on its website that after the merge, any stake in $ETH will remain locked and withdrawals will only be possible when Ethereum has its Shanghai upgrade:
“The staked ETH, stake rewards to date, and newly issued ETH immediately after The Merge will remain locked on the Beacon Chain with no option to withdraw.
“Withdrawals are planned for the Shanghai upgrade, the next major upgrade after The Merge. This means that newly issued ETH, even if accumulated on the Beacon Chain, will remain locked and illiquid for at least 6-12 months after The Merge.“
Kraken offers this information about unstaking on the Merge FAQ section of its website:
“Put ETH cannot be postponed or transferred on the Ethereum network until after the Shanghai upgrade. This means that clients should only bet on ETH that they plan to hold for the long term. This limitation is not specific to Kraken – it is a limitation on the Ethereum network itself.“
Then, on Friday (September 16), after the operator of the $ADA stake pool pointed out that no date has been announced for Ethereum’s Shanghai upgrade, the IOG chief compared the situation that $ETH players find themselves in to being stuck in ” Hotel California”.
As you may know, “Hotel California” is “the title track from the Eagles’ album of the same name and was released as a single in February 1977.” This is the last part of the song:
“The last thing I remember was me
Running towards the door
I had to find the passage back
To the place I was before
“Relax,” said the night man
“We are programmed to receive
You can check out whenever you want
But you can never leave’“
