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Several identified crypto addresses have millions of dollars either stuck or forgotten about in at least two large bridge contracts, according to blockchain intelligence firm Arkham.

There are dozens of accounts with 6-7 figures stuck in bridge contracts, forgotten about, said Arkhamin an April 22 X post., including wallets connected to Ethereum co-founder Vitalik Buterin, crypto exchange Coinbase, and several DeFi whales.

The firm attached two screenshots of fund transfers to and from the Arbitrum and Optimism bridges to support their case.

Arkham noted a wallet that received 50 Ether (ETH) from Buterin has had $1.05 million stuck in the Optimism bridge for seven months now. If the address is owned by Buterin, it would represent a small fraction of his $789 million cryptocurrency portfolio, according to Arkhams data.

Another wallet linked to Bofur Capital, which shares the same name as a Celsius creditor, has $1.8 million in wrapped-Bitcoin (WBTC) stuck in the Arbitrum bridge, which hasnt moved in 27 months, while Thomasg.eth the pseudonymous founder behind decentralized air transportation solution Arrow has $800,000 in Ether stuck in the Arbitrum bridge.

Furthermore, Coinbase tried to bridge $75,000 in USD Coin (USDC) to Ethereum six months ago via the Optimism bridge, but it hasnt been claimed on Ethereums base layer yet, Arkham said.

Related: Wormhole bridge hacker from 2022 was briefly eligible for the recent airdrop

There is, however, also a possibility that the owners behind these wallets still have complete control of the funds and have voluntarily chosen to park the funds there for the time being.

Cross-chain bridges play an important part in modular blockchain networks like Ethereum, which prioritizes data availability and security on the base layer and offloads transaction responsibilities to layer 2s.

However, bridges have become a honeypot site for hackers, as they are often automated by potentially vulnerable smart contracts or a highly centralized validator set.

For example, the $650 million Ronin bridge hack orchestrated by North Koreas state-backed Lazarus Group came after it obtained access to five of the nine private keys held by transaction validators in March 2022.

Magazine: SEAL 911 team of white hats formed to fight crypto hacks in real time

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DeFi whales have millions 'forgotten' in bridge contracts: Arkham - Cointelegraph

In his latest talk at ETHTaipei, Ethereum founder Vitalik Buterin introduces Rainbow Staking as a way to combat growing centralization concerns around staking.

Buterin notes that staking in general and liquid staked tokens today have become centralization risks on the Ethereum blockchain.

He highlights that there are not enough solo stakers on Ethereum today, citing technical challenges like running your own node and financial restraints like not having more than 32 ETH.

This is because, on Ethereum, solo stakers must deposit 32 ETH (~$ $113,233) to join the network as validators. Many individuals who wish to stake their ETH do so by delegating their tokens to liquid staking solutions.

One of the most popular liquid-staked solutions today is Lido, which currently has a 61.36% dominance over the market today.

Read more: Did Lido fly too close to the sun? Inside the centralization debate

Buterin remarked that a proposed solution to these centralization concerns around staking is Rainbow Staking.

The idea here is that you explicitly split up into two kinds of staking, and you call it heavy staking and light staking, Buterin said.

In this particular case, heavy staking is slashable and signs in every slot. On the contrary, light staking, which is not slashable, is pulled up to sign slots through a lottery system.

You basically try to explicitly separate out those two and potentially require both heavy stakers and light stakers to sign off on a block in order for the block to get finalized, he said. So you try to add the security of both of those approaches together.

Read more: The biggest Ethereum upgrade ever goes live

The framework of Rainbow Staking is ultimately hoping to counter the emergence of one dominant liquid staked token that could replace ETH as the main currency on the Ethereum network. It is also designed to offer competitive participation by bolstering the economic value of being a solo staker.

Buterin notes that more research and development is still required before Rainbow Staking becomes a viable design for staking on Ethereum in the long term.

To me, the biggest questions here are not even technical; theyre philosophical, Buterin said, noting that it is important to understand the intended answer behind ways to enable lazy ETH holders who want rewards to participate in securing the Ethereum network.

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Vitalik Buterin talks 'Rainbow Staking' at ETHTaipei to combat centralization risks - Blockworks

It was an unusual question. Vitalik Buterin pondered it for a moment before answering.

When I make my own food its basically putting almond butter and dark chocolate and coconut milk and various fruits into a bowl, and then thats my breakfast, said Buterin.

So its sweet? asked the interviewer.

Its not sweet, he clarified. Ninety percent chocolate. When I say chocolate, I always mean chocolate, I dont mean sugar with a little bit of chocolate.

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There was a bit of laughter. It happened again when he made a Dogecoin joke. He spoke a bit of Mandarin and people clapped and cheered.

Buterin, the leading architect of Ethereum, was speaking to a room of reporters on Thursday at ETHTaipei 2024, one of the several conferences the networks governing foundation hosts to showcase the latest features of the worlds second most valuable cryptocurrency network.

Even as he answered queries that might be better suited for a social media influencer than a gifted computer scientist, the big news of the day went unmentioned.

On Wednesday, Fortune magazine reported that the US Securities and Exchange Commission was examining whether Ethereums token, Ether, should be defined as a security.

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Crypto lawyer Gabriel Shapiro told DL News the reported review may put the kibosh on the push by Wall Street asset management firms to bring out Ether ETFs.

It could give them an excuse to not approve an ETH ETF, which is likely their biggest objective here, Shapiro said.

The headlines eclipsed the buzz around Ethereums latest upgrade, dubbed Dencun, at least for a day.

And when I interrupted at the end of the group interview to ask Buterin about the regulatory issue, he shut me down quickly with a sharp no and a long stare.

It seems addressing the elephant in the room was way too off-message for the Ethereum co-founder.

In the meantime, the Ethereum enthusiasts in Taipei attending the conference at a former bottle cap factory called Popop dove into the arcana of decentralised finance.

In a keynote address delivered to a packed hall, Buterin talked about centralisation risks in the ecosystem, the barriers to people becoming validators, and rainbow staking.

His audience lapped it up, with hundreds of mobile phones pointed in his direction to capture his presentation.

As for what may happen if Ether is deemed a security by US authorities, that has yet to be addressed.

The Ethereum Foundation has not commented on the news that three companies were subpoenaed by the SEC for information related to the network.

This is a massive issue if Ether and other altcoins are legally defined as securities then their issuers would have to register them with regulators before they can be offered on exchanges such as Coinbase or Kraken.

While such a decision would almost certainly be challenged by the industry in court, it would also create a period of uncertainty just as institutional investors are finally embracing crypto as a bona fide asset class.

Which brings me back to the Buterin group interview and its restrictive setup.

Questions were submitted in advance and asked by one of ETHTaipeis organisers rather than the assembled reporters. You couldnt ask follow-up questions or seek clarification.

The pre-approved questions run the range from cooking and travel to human longevity and AI, interspersed with technical explanations on the minutiae of various aspects of Ethereum.

It felt more like watching an IRL webinar than a press conference. The format, needless to say, was hardly conducive to the open source, transparency-at-all-costs ethos Buterin has prescribed for DeFi.

Then again, the censorship vibe wasnt all that surprising.

At Token 2049 in September last year, Changpeng Zhao, then the CEO of Binance, waxed lyrical about NFT use cases during his talk rather than the regulatory pressure his company was confronting in the US and other nations.

And among the true believers in Taipei, few seem fazed by the format.

The conferences devs and fans are far more interested in verkle trees and zero knowledge roll-ups than regulatory battles on the other side of the world.

And Ether surged almost 10% on Thursday.

Callan Quinn is DL News Hong Kong correspondent. Get in touch at callan@dlnews.com.

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Vitalik Buterin talks sweets and verkle trees but don't ask him about the SEC's review of Ethereum - DLNews

Buterin pointed to stablecoins and non-financial applications like social and identity as key opportunities for Ethereum to reach new users.

Vitalik Buterin, Ethereums co-founder and chief scientist, believes the next five years will be critical in determining whether the network can achieve mainstream adoption.

Speaking during aninterviewat the ETHTaipei conference on March 20, Buterin predicted that the next half-decade will prove whether Ethereum is ready for real-world adoption.

Buterin said stablecoins have emerged as the leading use case for crypto in recent years. Indeed, stable tokens facilitate frictionless payments, protection from price fluctuations and inflation for users residing in countries with volatile fiat currencies, and a popular on-and-off ramp to the broader web3 ecosystem.

Buterin asserted that low fees and high-quality user interfaces are critical to ensure that stablecoins continue to reach new audiences.

Historically, Ethereum has not had those things, but, over the next five years, Ethereum will start to have those things, Buterin said. Were already seeing Layer 2s starting to get there... I expect Ethereum to be a very leading player in helping to make stablecoin accessible to people in a way that actually is open, actually is decentralized, and actually doesnt require trusting fragile third-parties.

Buterins comments came a little over one week after Ethereums highly-anticipatedDencun hard forkwent live, ushering in a huge reduction in Layer 2 transactions through the activation ofEIP-4844.

Data from GrowThePie shows the average transaction fees on leading L2s plummeting byup to 98%since Dencuns deployment, making Ethereums Layer 2 ecosystem competitive with low-cost Layer 1s like Tron and BNB Chain while inheriting the decentralization of Ethereums base layer.

Tron and BNB Chain, networks that offer low fees at the expense of adopting a highly centralized network architecture, currently dominate on-chain stablecoin activity.

A recentreportfrom the Brevan Howard hedge fund found that 49% of weekly active wallets using stablecoins resided on Tron at 2.41 million, followed by BNB Chain with 1.37 million users or a 28% dominance. Ethereum came in third with just 379,769 or a 7.7% market share.

Data from DeFi Llama also suggests Tether (USDT) on Tron boasts a 70% dominance with $104 billion of the on-chain stablecoin sectors $148 billion market cap.

Buterin also predicted that non-financial applications will have a significant impact as a vehicle driving mainstream adoption, noting the success of decentralized social platforms includingFarcasterandLens.

There is a big desire to have alternatives to things like Twitter and Facebook at the moment, he said. Farcaster has] managed to be used by non-crypto people in a way that a lot of other applications have not. I think thats an important success to build on and for other applications to try to replicate.

Vitalik also highlighted the growing interest in decentralized identity and proof-of-personhood protocols on Ethereum amid the backdrop of increasing concerns regarding the rise of artificial intelligence.

One of the big challenges that people are worrying about right now is how to prove that an account on some platform is a person, as opposed to being a bot, Buterin said. The big risk I see is that when people need to solve that problem, people will jump to centralized solutions, and centralized solutions are going to have very bad risks in terms of excluding all kinds of people.

Buterin also noted that prominent ideas underpinning the ethos of web3 are also beginning to penetrate the mainstream. He cited the upcoming initial public offering fromReddit, the popular social media platform, which will give highly active users including contributors and moderators the ability to participate on the same terms as institutional investors.

Reddit likely drew inspiration from theairdropmodel that rewards early adopters of web3 dApps.

Looking forward, Vitalik emphasized his excitement for Verkle Trees, which will be implemented as part of Ethereums next hard fork, Pectra. Buterin noted that technical barriers are persistently cited as a major factor discouraging ETH holders from staking.

With Verkle Trees, as a node, you would not have to store the state locally. And with EIP-4444: History Expiry, you would not have to store most of the history locally, Buterin said. The amount of data that you would need to be a node would decrease from multiple terabytes to... being able to run a node in RAM.

Vitalik continued that the future introduction of zk-SNARKs will reduce the data burden for nodes even further.

In the long term, running a node will feel like a few very simple computations that will be very easy to do as a background process on any computer, maybe even a phone, even inside a browser, Buterin said. Theres a pre-existing technology roadmap to get to that point.

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Vitalik Says Ethereum Must Achieve Mainstream Adoption Within Five Years - The Defiant - DeFi News

Ethereum Co-Founder Vitalik Buterin spoke at the ETHTaipei 2024 event, which takes place in Taipei from March 21 to 24.

Buterin stated that one of the critical problems with Ethereums proof-of-stake (PoS) is the potential centralization. He supported the concept of rainbow staking, initiallyintroduced in February by Barnabe Monneau of the Ethereum Foundation. The proposed mechanism is designed to motivate all categories of service providers, both single and professionals, to participate.

Vitalik continued to discuss the centralization risk of ETH staking on ETH Taipei, emphasizing that LIDO COINBASE BINANCE and others have an excessive share, and introduced the idea about "rainbow staking", a conceptual framework allowing protocol service providers, whether pic.twitter.com/rfFlcxNzyc

One of the main ideas of the developer is to consolidate the existing division into operators and delegators, as well as the introduction of classes of heavy and light services with different levels of responsibility and income.

In his speech, Buterin drew attention to a category he called lazy stakers. Its representatives own 32 Ethereum (ETH), the minimum threshold for the validator to operate. Typically, such a group uses pools and liquid staking instruments. The Ethereum founder believes stakeholders could opt for individual staking to reduce centralization risks.

Buterin also noted that users were repeatedly told not to use Lido Finance, while its total value locked (TVL) is now $34.3 billion, being the largest Ethereum validator and controlling more than 30% of assets. Other major providers of liquid staking services include Binance and Coinbase, which are major crypto exchanges.

In October 2023, Buterin proposed staking changes aimed at reducing Ethereums centralization. He expressed concern about asset distribution among Ethereum liquid staking providers. At that time, the liquid pool of the Lido Finance platform controlled more than 70% of Ethereum in staking, although the asset is distributed among various validators.

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Vitalik Buterin supports 'rainbow staking' to fight centralization issues - crypto.news