What matters is whether or not there’s any significant profit - the reward being bigger than the cost. PoW minimizes this with difficulty adjustment flushing most profits down the toilet. PoS must always have a return competitive with other investments.
Profits should be low, or else it promotes inequality.
You get one asset with worse interest that can be spent (like dollars), and one asset with better interest that can’t be spent (like bonds). The poor hold the former, the rich hold mostly the latter.
If there’s a low barrier to entry then you’re just reinventing POW because someone can run as many nodes as possible with minimal stake in order to maximize returns. Can you give an example of one successful “fixed rewards” Crypto coin?
Why? If the rewards are fixed and independent of the amount staked then there is no issue.
What matters is whether or not there’s any significant profit - the reward being bigger than the cost. PoW minimizes this with difficulty adjustment flushing most profits down the toilet. PoS must always have a return competitive with other investments.
Profits should be low, or else it promotes inequality.
No. It needs to offer a reward enough to pay the minimum number of validators needed to establish a secure network.
2x the number of stakers means 1/2 the return for each validator, but the network doesn’t care about that.
With too low a return they just invest elsewhere.
You get one asset with worse interest that can be spent (like dollars), and one asset with better interest that can’t be spent (like bonds). The poor hold the former, the rich hold mostly the latter.
Low returns and people leaving is not a problem.
There will still be enough validators to secure the network. The remaining will get a higher return.
What’s the minimum you mentioned earlier?
Minimum Viable Validator Count Ethereum requires at least 2,000-4,000 validators to maintain strong network security. Currently, there are over 900,000 validators actively securing Ethereum, making attacks prohibitively expensive.
If there’s a low barrier to entry then you’re just reinventing POW because someone can run as many nodes as possible with minimal stake in order to maximize returns. Can you give an example of one successful “fixed rewards” Crypto coin?
Ethereum.
The overall network issuance rate is fixed and currently roughly 4.5% per year. If more people stake then less is received per person.
Minimal stake is is $75k per validator.
This stake is slashed if you are dishonest.