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pintail
@pintail
Interested in reactions of folks here to the issuance changes discussed by @caspar + @ansgar.eth. Would a reduction in yield make staking unviable for you? I'm sympathetic to the argument that allowing the staking fraction to trend ever upwards will eventually cause big problems. https://warpcast.com/caspar/0x81148881
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Thomas
@aviationdoctor.eth
I fully agree with the intent of implementing a more aggressively decreasing issuance curve to target a staking ratio of 1/4 or less. Given that we’ll have likely exceeded the target ratio at the time of this incentive change, that means decreasing the yield right away. 1
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Thomas
@aviationdoctor.eth
Solo staking is already at a low ~3.1% yield, though, which is below that of T-bills in most countries, and with higher risk. 2
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Thomas
@aviationdoctor.eth
So, the only reasons I might continue to stake in a 0–3% yield environment are A) if it’s still better than mere holding (and as long as I expect ETH to keep appreciating in value, otherwise I’d be better off selling), 3
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Thomas
@aviationdoctor.eth
B) my own real yield is effectively higher because I bought early / at a lower price (e.g., doubling in price = doubling in yield). That’s again only true if the price remains sustained 4
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Thomas
@aviationdoctor.eth
C) the monetary interest rates falls back down to near zero like it was not too long ago (in which case even a lower staking yield is still a superior return)
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Thomas
@aviationdoctor.eth
But frankly I’d be unhappy if solo stakers were the first to be incentivized to exit (due to their operating costs) and all that remained were LSTs. I’ve said it before, but LST holders aren’t doing any work securing the network and I don’t think should be rewarded. 6
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Thomas
@aviationdoctor.eth
Solo stakers are in sufficient numbers to provide sufficient security to the network, and in fact would be in slightly greater numbers if LSTs didn’t exist (due to higher yields). I wish we could differentiate solo validators and SSPs in this change proposal for staking incentives. 7
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pintail
@pintail
What are the operating costs for solo stakers? I personally don't have any because I'm just using hardware that I've had for years on my home internet connection. So I'm better off because I'm not sharing my yield with Lido/Coinbase/whoever
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