With the recent slashing of Ethereum from various validators, the debate around staking models has once again taken center stage. Many in the crypto community are pointing to Cardano’s more resilient structure as a key differentiator in the staking landscape. While Ethereum’s system penalizes validators for downtime or misbehavior, Cardano’s staking approach offers delegators security without the fear of losing funds.
Why Simplicity And Resilience Are Cardano’s Key Advantages
The slashing of 11.7 ETH from 39 Ethereum validators on September 10 has brought to light the advantages of Cardano’s staking structure. Crypto analyst Dori has highlighted the fundamental differences in staking requirements and risks between the two networks. On Ethereum, staking directly with 0.1 ETH is not possible, as individuals are required to stake a minimum of 32 ETH and operate a validator node themselves.
Platforms have been developed on Ethereum to enable staking with as little as 0.1 ETH, with liquid tokens being issued. However, the key distinction lies in Ethereum’s slashing mechanism, which poses the risk of a cascading collapse. This has led to the emergence of platforms like Ankr and Lido Finance, which pool ETH from multiple users, run validators, and issue liquid staking tokens to address the issue of locked-up funds.
In the recent incident, an operational error by the operators of 39 validators resulted in a slashing penalty of 11.7 ETH, amounting to approximately $52,000. A larger slashing event could potentially lead to the de-pegging of liquid staking tokens, triggering a cascading collapse within the DeFi ecosystem protocols built on them.
Cardano’s staking model, on the other hand, allows anyone to stake as little as 10 ADA in a stake pool without the risk of slashing. There are no lock-up periods, and users’ staked funds are never in danger of being lost, even if their chosen stake pool misbehaves.
Fundamentally Different Approaches To Staking
Cardanians (CRDN) have also highlighted a critical flaw in Ethereum’s staking model, emphasizing the fundamental advantages of Cardano’s design. Data shows that the Ethereum staking exit queue has reached an all-time high, resulting in users having to wait an estimated 46 days to retrieve their unstaked ETH.
In contrast, Cardano’s ADA staking model offers a vastly different experience, with liquid staking and no entry or exit queues. When users stake their ADA, the funds remain in their wallet and are always accessible for use or transfer, earning rewards without being locked up. This design is fundamentally superior, providing a seamless and secure staking experience for users.