this post was submitted on 15 Apr 2025
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I can appreciate that your intentions here are good but I remain convinced that you've got the economic aspect of this quite wrong. If the rewards of staking were zero the network would be at risk because nobody would be willing to do the necessary work of securing it. This is in stark contrast to land, which would be just as capable of productive use even without a rich person to own it. Validator slots are freely available to anybody who is prepared to do the required work and dedicate the required capital, and they are subject to unrestricted competition from other stakers and other networks, their profits do not come from any privilege given by law or unnatural strategic advantage. The full cost of staking is surprisingly difficult to determine, it's potentially much more than just the cost of hardware and electricity given the risk involved, not just from slashing but also from holding a volatile asset, in addition to the sacrificed opportunity cost of the staked capital. The rewards of staking would fall to less than half of what they are today if the percentage of Ethereum staked were to get anywhere close to 100%, and if the price of Ethereum were to fall in the future they could well already be effectively less than zero.
Difficulty adjustment minimizes profits (rewards - costs), not block rewards. The profit is the problem.