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Ethereum post-merge looks a hell of a lot like a security. We'll see what regulators do, but it's concerning that the Ethereum Foundation has been so quiet abou

Ethereum post-merge looks a hell of a lot like a security. We'll see what regulators do, but it's concerning that the Ethereum Foundation has been so quiet about regulatory hazard. Also alarming is the question marks as to when you'll be able to withdraw staked Ethereum, given the security risks from attacks intended to cause slashing and the dependence on total stake for what the staking rewards are.

dmak 4y ago
Do you have more specifics in what you are referring to?
- moralestapia 4y ago
  Ethereum PoW could be seen (if you squint hard enough) as some sort of activity that produces a good (through mining) and its respective marketplace. Ehereum PoS is just a financial asset with a weird governing structure (like a currency future? idk). It's basically standard stock.
  - deleted 4y ago
    [deleted]
  - vanviegen 4y ago
    Something is called a 'good' if it has some inherent with to some people. PoW does not. Exhaust gas isn't a good either. PoW and PoS are both financially assets with a weird governing structure, I'd say.
- deleted 4y ago
  [deleted]
- jhugo 4y ago
  Staking ETH pays interest, so buying ETH is buying an interest-bearing asset (i.e. a security). Some of the biggest players in staking will be exchanges who will likely give some (most) of the interest they earn to their depositors. Those exchanges are then a ripe target for existing securities regulation, and they'll also be the biggest validators on the network, so risk for them is risk for the whole network.
  - rvz 4y ago
    > Those exchanges are then a ripe target for existing securities regulation, and they'll also be the biggest validators on the network, so risk for them is risk for the whole network. This. Of all comments this is the centralization risk on top of proof-of-stake which will have a more involved focus on staking with it being highly likely that it now passes the Howey test that ETH looking more like a security, with the Ethereum Foundation at the center of all of this.
  - capableweb 4y ago
    > Staking ETH pays interest, so buying ETH is buying an interest-bearing asset Buying Eth will be the same as before. What you could say, is staking Eth is what makes it an interest-bearing asset, not just buying Eth.
    - tzekid 4y ago
      As far as I understand, without any work (energy consumption) that is directly tied to the value of the asset, there's no argument left for it to be a currency, i.e. it can only be categorised as a security asset.
      - capableweb 4y ago
        Buying Eth: No investment in a common enterprise, no expectation of profit nor is that non-profit derived from others. Not a security. Staking Eth: Investment in common enterprise, expectation of profit and profit derived from others. Looks and quacks like a security. Buying and holding Eth without staking it shouldn't be considered a security, while staking said Eth should be considered a security. At least if we're still following the "Howey Test".
        jhugo 4y ago
        If there were two tokens, one of which was stakeable and the other not, traded separately but convertible, then sure. But that's not reality. ETH's value is in part defined by its ability to bear interest. Whether you personally stake or not has no bearing on whether your ETH is a security.

dmak 4y ago

Do you have more specifics in what you are referring to?

moralestapia 4y ago
Ethereum PoW could be seen (if you squint hard enough) as some sort of activity that produces a good (through mining) and its respective marketplace. Ehereum PoS is just a financial asset with a weird governing structure (like a currency future? idk). It's basically standard stock.
- deleted 4y ago
  [deleted]
- vanviegen 4y ago
  Something is called a 'good' if it has some inherent with to some people. PoW does not. Exhaust gas isn't a good either. PoW and PoS are both financially assets with a weird governing structure, I'd say.
deleted 4y ago
[deleted]
jhugo 4y ago
Staking ETH pays interest, so buying ETH is buying an interest-bearing asset (i.e. a security). Some of the biggest players in staking will be exchanges who will likely give some (most) of the interest they earn to their depositors. Those exchanges are then a ripe target for existing securities regulation, and they'll also be the biggest validators on the network, so risk for them is risk for the whole network.
- rvz 4y ago
  > Those exchanges are then a ripe target for existing securities regulation, and they'll also be the biggest validators on the network, so risk for them is risk for the whole network. This. Of all comments this is the centralization risk on top of proof-of-stake which will have a more involved focus on staking with it being highly likely that it now passes the Howey test that ETH looking more like a security, with the Ethereum Foundation at the center of all of this.
- capableweb 4y ago
  > Staking ETH pays interest, so buying ETH is buying an interest-bearing asset Buying Eth will be the same as before. What you could say, is staking Eth is what makes it an interest-bearing asset, not just buying Eth.
  - tzekid 4y ago
    As far as I understand, without any work (energy consumption) that is directly tied to the value of the asset, there's no argument left for it to be a currency, i.e. it can only be categorised as a security asset.
    - capableweb 4y ago
      Buying Eth: No investment in a common enterprise, no expectation of profit nor is that non-profit derived from others. Not a security. Staking Eth: Investment in common enterprise, expectation of profit and profit derived from others. Looks and quacks like a security. Buying and holding Eth without staking it shouldn't be considered a security, while staking said Eth should be considered a security. At least if we're still following the "Howey Test".
      - jhugo 4y ago
        If there were two tokens, one of which was stakeable and the other not, traded separately but convertible, then sure. But that's not reality. ETH's value is in part defined by its ability to bear interest. Whether you personally stake or not has no bearing on whether your ETH is a security.