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Actually, originally no; stocks paid dividends.
by z3rgl1ng 5y ago
Actually, originally no; stocks paid dividends.
- dcolkitt 5y agoEthereum also pays dividends in the form of staking rewards. About 7% today, and most likely going to 10%+ post-merge. That makes the yield on Ethereum significantly higher than the majority of stocks in developed markets.
- seoaeu 5y agoStocks pay out their dividends in fiat currency, not additional shares.
- dcolkitt 5y agoThe analogy would work if Ethereum staking rewards were inflationary. But post-EIP 1559, there's a zero-to-negative net issuance of Ethereum on an ongoing basis. After the merge, the entirety of that (plus MEV bribery) goes to stakers/validators. In this sense, Ethereum's yields are more like a stock buyback than a stock dividend. To transact on-chain, end-users and traders have to pay ETH to validators. To acquire ETH they have to bid on it using fiat. ETH issuance to stakers isn't inflationary, because its counter-balanced by end-user demand to transact on-chain. Just the same, as a stock buyback doesn't involve any direct payout of fiat currency to existing shareholders. But it takes the revenue generated by the underlying company, and translates that into a deflationary bid to the stock.
- baxtr 5y agoOk, fair. But that was when again? How is this relevant today, when people hate crypto and think stocks are ok?