4 ms·

Something I am interested in but haven't seen much on is the idea of creating a proof of stake system where the value of one's stake is directly related to how

Something I am interested in but haven't seen much on is the idea of creating a proof of stake system where the value of one's stake is directly related to how liquid it is. i.e. how much they actually use their funds. Think currency regularly moving in and out of their account, providing smart contract loans, etc. I feel as if a proof of stake system that requires those staking to not only support the network but also be heavily involved in it as well would resolve some of the issues with current proof of stake systems.

wmf 8y ago
Proof of Wash Trading!
__blockcipher__ 8y ago
How do you deal with spam tx? In other words pretending to use your stake but you’re not actually? The same issue as what i’ve encountered when trying to imagine a cryptocurrency that is slightly inflationary, like 1% yearly. There is no objective way to decide how much the money supply should grow, as far as I can tell, because there is no way to separate “real” from “fake” usage.
- jacoblambda 8y ago
  One aspect that wouldn't eliminate the issue of "useless" or fake tx would be to have the liquidity aspect be a modifier where stakes being il-liquid devalue but over some threshold, the stake modifier is at a constant 1x. Another potential mitigation tool would be to have the protocol look for tight tx loops (i.e. Naive liquidity falsifying) and either negate or reduce their influence on the liquidity calculation. Whether this is actually possible I have absolutely no idea. If I was to have any real trust in this idea I would have to look for/develop either formal proofs or some real demonstrable examples of it working. Beyond that I think it boils down to game theory and economics. If it could work, it would likely require careful calibration to minimise the benefit of gaming the system or otherwise being a bad actor.
  - __blockcipher__ 8y ago
    My brain isn't working very well right now so I'm having trouble understanding what you're saying, but is what you're getting at similar to the metric of "coin days destroyed"? (ie if you send 5 BTC to address foo and those 5 BTC haven't been moved for 365 days then you've destroyed 365*5 coindays
    - jacoblambda 8y ago
      More or less ya that is about right. Now that would still only be part of the overall calculation as I think that assets such as loans and smart contracts should be considered in the calculation. The money from loans and such is in use by people on the network but its owner should still be able to claim it for staking purposes.

wmf 8y ago

Proof of Wash Trading!

__blockcipher__ 8y ago

How do you deal with spam tx? In other words pretending to use your stake but you’re not actually? The same issue as what i’ve encountered when trying to imagine a cryptocurrency that is slightly inflationary, like 1% yearly. There is no objective way to decide how much the money supply should grow, as far as I can tell, because there is no way to separate “real” from “fake” usage.

jacoblambda 8y ago
One aspect that wouldn't eliminate the issue of "useless" or fake tx would be to have the liquidity aspect be a modifier where stakes being il-liquid devalue but over some threshold, the stake modifier is at a constant 1x. Another potential mitigation tool would be to have the protocol look for tight tx loops (i.e. Naive liquidity falsifying) and either negate or reduce their influence on the liquidity calculation. Whether this is actually possible I have absolutely no idea. If I was to have any real trust in this idea I would have to look for/develop either formal proofs or some real demonstrable examples of it working. Beyond that I think it boils down to game theory and economics. If it could work, it would likely require careful calibration to minimise the benefit of gaming the system or otherwise being a bad actor.
- __blockcipher__ 8y ago
  My brain isn't working very well right now so I'm having trouble understanding what you're saying, but is what you're getting at similar to the metric of "coin days destroyed"? (ie if you send 5 BTC to address foo and those 5 BTC haven't been moved for 365 days then you've destroyed 365*5 coindays
  - jacoblambda 8y ago
    More or less ya that is about right. Now that would still only be part of the overall calculation as I think that assets such as loans and smart contracts should be considered in the calculation. The money from loans and such is in use by people on the network but its owner should still be able to claim it for staking purposes.