According to Hoskinson, Ethereum’s staking looks “a lot like regulated products” because it involves “temporarily giving up your assets to someone else to … get a return.” He added that:
“Locking funds, encouraging centralization, and poor protocol design hurts the whole industry.”
Hoskinson was responding to Coinbase CEO Brian Armstrong’s statement that the SEC was planning to ban retail access to staking.
Hoskinson implied 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 US Securities and Exchange Commission (SEC) has increased its regulatory scrutiny over the crypto industry, bringing several cases against crypto firms. The Commission’s chairman Gary Gensler previously said crypto exchanges offering staking services offer services similar to lending even if there are changes in the labeling.
The comment generated several heated responses from the crypto community over the Commission’s understanding of crypto staking. Hoskinson said:
“All proof of stake protocols might get lumped together due to a fundamental misunderstanding about the actual facts of operation and design [of staking].”
Meanwhile, this is not the first time Hoskinson criticized Ethereum’s staking. The Cardano founder previously described the blockchain network as the “Hotel California of crypto.”