[rfoo]

Sure, friends also won't let friends skip the fact that circulating supply of ETH is now decreasing instead of increasing.

Also, only ~30% tokens are staked. The 30% who chose to stake essentially tax the other 70% in use. Each of the validator do the same amount of work (ok, strictly speaking you get to do more when you have more ETH staked, but being a validator is cheap and does not cost significantly more energy even if you are being selected more frequently because running one proposal is too cheap, that's the whole environmental point, right?) except what they receive is proportioned to how much they stake.

I hate being mean, but sorry, remembering to check one's assumption is a habit I gained after elementary school, so maybe that's too hard for you.

[pa7x1]

> Sure, friends also won't let friends skip the fact that circulating supply of ETH is now decreasing instead of increasing.

This changes absolutely nothing of the calculation. Furthermore, the change in circulating supply last year was of 0.07%.

> Also, only ~30% tokens are staked.

Correct.

> The 30% who chose to stake essentially tax the other 70% in use.

There is something called opportunity cost. With the existence of liquid staking derivatives the choice to stake or not is one of opportunity cost. Plenty of people may consider the return observed by staking insufficient given the opportunity cost and additional risks. Participating in staking is fully permissionless, stakers are not taxing non-stakers. They are being remunerated for their work.

> Each of the validator do exactly same amount of work (that's the point, right) except what they receive is proportioned to how much they stake.

Incorrect. A staker does proportionate amount of work to its stake. That's why it gets paid more. A staker gets paid for fulfilling its duties as defined in the protocol (attesting, proposing blocks, participating in sync committees). For each of those things there are some rewards and some punishments in case you fail to fulfill them. If a staker has more validators running you simply fulfill more of those duties more often, hence your reward scales linearly with number of validators.

[rfoo]

> Participating in staking is fully permissionless, stakers are not taxing non-stakers. They are being remunerated for their work.

That's just a more polite way to say tax. Being permissionless is cool, but it's still tax in my dict.

> There is something called opportunity cost.

And, who is going to be able to have a larger percentage of their funds staked, a poor or a whale? You need a (mostly) fixed amount of liquidity to use the thing.

> Incorrect. A staker does proportionate amount of work to its stake.

Apologies, I edited my original reply which should answer this.

In short, I don't see anything preventing me to run 10000 validators with 32 ETH each with very similar cost to running just one. It's certainly not linear.

[pa7x1]

> That's just a more polite way to say tax. Being permissionless is cool, but it's still tax in my dict.

It most certainly is not. They are doing a work for the network and getting remunerated for it. That's not a tax. That's what is commonly referred to as a job. A kid that delivers newspapers over the weekend is not taxing the kid that decides not to. Both make a free decision on what to do with their time and effort given how much it's worth to them. Running a validator takes skill, time, opportunity cost, and you assume certain risks of capital loss. You are getting remunerated for it.

> And, who is going to be able to have a larger percentage of their funds staked, a poor or a whale? You need a (mostly) fixed amount of liquidity to use the thing.

Indeed, the protocol cannot solve wealth inequality. That's an out of protocol issue. It cannot cure cancer either.

> In short, I don't see anything preventing me to run 10000 validators with 32 ETH each with very similar cost to running just one. It's certainly not linear.

There are some fixed costs, indeed. But they are rather negligible. You need a consumer-grade PC (1000 USD) and consumer-grade broadband to solo stake. Or you can use a Liquid Staking Derivative which will have no fixed costs but will have a 10% cut. The curve of APY as a function of stake is very flat. Almost anything else around us has greater barriers of entry or economies of scale.

[everfree]

> And, who is going to be able to have a larger percentage of their funds staked, a poor or a whale?

This is a truth that's fundamental to all types of investing. Advantaged people can set aside millions and not touch it for a year or five or twenty. Disadvantaged people can't invest $20 because there's a good chance they'll need it to buy dinner.

Stocks, bonds, CDs, real estate, it all works like this. You've touched on a fundamental property of wealth.

[rfoo]

Indeed, I guess you can say I hate wealth.

Wel, but at least in PoW you burn actual money (and in the end, actual resource) proportioned to your profit to keep the network running. In PoS you burn nothing.

[hanniabu]

> Also, only ~30% tokens are staked. The 30% who chose to stake essentially tax the other 70% in use.

And in PoW miners tax 100% of holders.

> what they receive is proportioned to how much they stake

Wealthy miners with state of the art ASICS benefit more than some kid mining at home with an old GPU. Maintenance/cost of mining equipment benefits from economies of scale too.

I hate being mean, but sorry, remembering to check one's assumption is a habit I gained after elementary school, so maybe that's too hard for you.

[rfoo]

Yeah, PoW is bad too. But I'm happy to pay a tax to those who burnt energy to keep the networking running and converted USD to the native token, proportioned to their effort.

I'm less happy to pay someone a tax just because they are rich and they did barely anything.

[Tricky_Troll]

>I'm less happy to pay someone a tax just because they are rich and they did barely anything.

As the operator of a single validator node you can get out of here with that take. I'm using up very significant bandwidth, having to keep a computer running 24/7, updating node and OS software, troubleshoot it after a power or internet outage and at some point I will have to replace the SSD since it is constantly reading and writing and will need replacing after a few years.

Is it a full time job? Absolutely not, but is it free from responsibility? Definitely not. If anything, I could be making more than 3%pa elsewhere if I weren't also in it for ideological reasons.

[domothy]

>But I'm happy to pay a tax to those who burnt energy to keep the networking running and converted USD to the native token, proportioned to their effort.

Why? That's doubly bad for non-mining holders: not only does your share of supply get diluted with newly printed coins, but it also get devalued relative to USD when these coins inevitably get sold to pay expenses

In Ethereum's post-merge world, non-staking holders can keep their share of supply the same (or even have it passively increase) when total supply shrinks. And if the supply does increase by ~0.5-1% and you as a holder aren't okay with that amount of dilution, the barrier of entry to stake profitably and protect your share of supply is much, much lower than the barrier of entry of profitable bitcoin mining.

And the total newly issued coins (which are nominally much lower than pre-merge) have a much lower need to be sold off. If you view issuance as a tax on holders, Ethereum's model wins on all counts

>just because they are rich and they did barely anything

But stakers also "keep the networking running", just like miners under PoW. In both cases, it's gonna be the amount of capital involved that decides how the rewards are proportioned, there's no way around it - these permissionless systems ultimately use the inherent scarcity of economic capital as the anti-sybil mechanism with economic incentives to keep everyone honest. PoS just bypasses the need for burning a huge amount of energy and the embarrassing quantity of single-purpose e-waste to indirectly calculate who has how much at stake. It goes straight to the point: the capital at stake is simply measured in the value of the coin itself instead of external energy/hardware.

On the outside it does kinda look like stakers get rewarded passivly for doing nothing, but there are definitely costs involved, they're just mostly economic instead of physical - think of all the usual risk involved in crypto's volatility, now compound that with slashing risks, illiquidity, opportunity costs – staking yield is like 4-5% atm (and has been down only for quite some time), if you're a billionaire whale you definitely have other investment opportunities available that yield way more than that. I mean just the fact that the net supply growth can go negative shows that even internally in the blockchain itself there can be better things to do with your ETH than stake it; these people aren't burning their ETH on transactions fees for fun, they're actively using their ETH to do stuff that gets them some economic utility.

[rfoo]

> but it also get devalued relative to USD when these coins inevitably get sold to pay expenses

Good point. It invalidates the "good" part but does not make it doubly bad IMO.

And for ETH, well, I don't think it's about protecting value, it's more about:

> In both cases, it's gonna be the amount of capital involved that decides how the rewards are proportioned, there's no way around it

Yes. The difference is, PoW requires you to BURN resource proportioned to your rewards, while PoS just requires you to HAVE (but not burn) it. This makes a huge difference IMO.

For example, I would consider it more "ethical" (whatever that means) to add a light PoW part (with constant or slowly increasing difficulty, that is chosen to reduce environmental impact) to the ETH PoS protocol as-is: the random-chosen validators have to solve a PoW in addition to make their efforts proportioned to how much they stake, instead of being mostly constant.

[hanniabu]

Okay so startup capital aside, you like PoW because there's an ongoing cost to participating in consensus and don't like how PoS is more or less free.

I'm not sure how you arrived at this when your initial complaint was the rich get richer with PoS. PoW has much higher costs to participate and after a few years you have more costs when you need to upgrade your mining rigs because they're either burnt out or outcompeted by newer hardware.