ethrd

My thoughts on issuance reduction:

To target < 100% staked ETH you assume:
- There is some yield “x%” where the market finds it irrational to take on the risks/opportunity costs of even delegating to someone else to stake
- Issuance curve is chosen such that we cross below x% before we get to 100% staked ETH

The problem is that I think:

- There is also some nominal yield “y%” that makes it irrational to be a solo or home staker after you get any lower than y%

And until you find a way to make solo/home staking more competitive relative to centralized alternatives:
- y% will always be greater than x%

So I think the worst case scenario is the one that we get an issuance curve that leads to:
- crossing below y% (no longer rational to solo/home stake)
- And even worse: we are still > x% even at 100% ETH staked, meaning we didn’t accomplish our primary goal, and our validator set is highly centralized

I think we should prioritize research to make decentralized staking more competitive, like ideas shown below:

https://ethresear.ch/t/how-optional-non-kyc-validator-metadata-can-improve-staking-decentralization/17032

https://ethresear.ch/t/supporting-decentralized-staking-through-more-anti-correlation-incentives/19116

Even if we choose a good x% and land at less than 100% staked ETH, we could still end well below y% and our validator set may end up highly centralized.

I’d rather Ethereum “over pay” for a robust validator set in the short term, than “under pay” and end up without a robust validator set