One thing I learned today:

On one of the last episodes of the Infinite Jungle by galaxy research they mentioned a research post by Anders Elowsson from Ethereum Foundation on the economics of eth staking issuance. The research report is quite lengthy so will be going into it over multiple blog posts.

Let’s break it down from the overview perspective first:

Problem: High staking issuance is leading to unnecessary costs for the ETH network. This could lead too:

• Excessive issuance: More ETH created than needed for security

• Dominance of Liquid Staking Tokens: Dominance of LSTs could overtake ETH as main source of money on the network

• Discouragement attacks and cartelization attacks: More likely with lower rewards

Solution: Adjust reward curve to reduce issuance of ETH for high staking levels

• lowers costs for network

• promotes solo staking

• maintains security by providing positive yield

Proposal:

Anders wants to promote the “Candidate Reward Curve” that gradually reduces rewards as staking increases to further balance security, decentralization, and user utility.

Personal opinion:

I somewhat agree that Liquid Staking protocols need to be restricted by amount staked at some point. I think having too much dominance in a few LSTs creates too many risks. Unless I’m understanding things incorrectly, blockchain was built to discourage double-spending and LSTs are representation of collateral in staking pool. And my concern is as more LST tokens are restaked or used as collateral in defi or trading that it opens up new collateral risk. If someone reading this can debunk this concern to me please do.

Affirmations:

I will run the 2024 NYC marathon under 4:00:00 and exceed my fundraising goal

I will grow my blog by 10% every month using web3 tools

Gratitude:

Grateful to have passions and strive to be better

Miracle morning:

Read: no

Meditate: no

Make my bed: yes

Workout: yes

Gratitude: yes

affirmations: yes