pintail on Warpcast

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https://ethstaker.cc

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pintail pfp

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 pfp

@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 pfp

@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 pfp

@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 pfp

@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 pfp

@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 pfp

@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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pintail pfp

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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Thomas pfp

@aviationdoctor.eth

Hardware CapEx (mine was ~$1K), electricity/bandwidth, opportunity cost of updating the node ~twice a month + occasional troubleshooting

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pintail pfp

Ok but capex is sunk cost so won't cause existing validators to leave, electricity/bandwidth are negligible in much of the world, and maintenance is minimal in my experience (thank you @somer), although UX could certainly be improved

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pintail pfp

Point is I'm better off as a solo staker than I am sharing the yield with a provider.

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Thomas pfp

@aviationdoctor.eth

It’s undeniable that there’s a cost to being a solo staker that doesn’t exist being an LST holder (the article also points that out). CapEx turns into RepEx when you have to replace your SSD, as is happening with lots of 2TB nodes. Mx is also not minimal - for instance Besu and Nimbus update twice a month each

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