[machina_ex_deus]

My intuition is that PoS isn't economically stable model. In PoW, the miners had interest in stability of prices because their costs were anchored in reality by the mining rig. So once you had expended the real life cost of a mining rig, your interests were to only increase the price of the coin. Whales might have wanted to manipulate prices but they ran the risk of bankrupting miners (many of them were miners).

Now the incentives are perverse. Since prices aren't anchored by real world expenses, the incentives of whale stakers is extreme price volatility, so that they can increase the share of the network they hold. They are free to pump and dump as they please even more than before because there's nothing anchoring them to reality. They get to set the price alone.

[betwixthewires]

Well, they can only move the price by whatever percentage they hold in ETH. I would assume, maybe naively but not unreasonably, that a holder with no plans to sell would see staking as a mostly risk free way of generating return. So I'd assume that these big guys would be putting most, if not all, of their capital into staking. Therefore I wouldn't expect their ability to move the market to be significantly higher than total staked ETH as a percentage of total supply.

Again, naively, people panic and a smaller but substantial move could cascade, but a news article could do that as well. Stakers don't have a monopoly on the ability to cause a stampede.

Last I read on the mechanics of all of this, the emission rate, burn rate, fee burn and staking requirement were designed in such a way as to keep a certain amount of total ether staked. I don't recall what that percentage was, I think around 10% and it's not exact, this is game theoretical after all and incentives are what drives this so it will fluctuate a bit.

There are problems with not having an ongoing cost to validation, and not having assets external to the system at risk, a big one is the so called "nothing at stake" problem which ethereum claims to have solved (and have a compelling case as to why if you read about it) but I don't believe this problem you speak of is one of them. I am somewhat concerned that these metrics to maintain a certain percentage at stake will not shake out the way they planned and have to be adjusted with a hard fork, this happens in ethereum all the time with incentive structures.

[machina_ex_deus]

The volumes of ETH trading are always orders of magnitude lower than how much the whales hold.

Market manipulation is prevalent in all markets all the time. The risk of market manipulation comes from other participants (the bigger a share of the market a whale has, the less risk he has) and from real world anchors (which are what sets the price of stocks in the longer term despite their short term randomness).

ETH whales always had the ability to do price manipulation. And they did it to some extent mostly to the upside. But they risked breaking the market if they manipulated to the downside.

The miners also had real world selling incentives. The game was rigged but at least price incentives aligned.

The problem isn't about whether PoS works. The problem is that the lack of real world anchors means the whales are free to manipulate price as they please. They can agree as a cartel on a price, low or high, beforehand, and keep buying from retail low and sell high and gain higher and higher share, manipulating both to the upside and the downside.

The problem is that PoS has no downside price manipulation disincentives, and it encourages hoarding. You'll end up like diamonds where most of those are hidden outside the market by a huge whale that exploits a monopoly on supply.

[DennisP]

ETH that's being staked is not available on exchanges to trade. If that manipulation is occurring, then PoS will reduce it by giving whales an incentive to take their ETH off the market, to stake it instead.