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Proof of stake is a pyramid scheme.

• zeroclip 4y ago
  um, no? How is it one? Validators are paid mostly from protocol reward by placing their capital at risk and performing the necessary work to validate the network.
  • xigoi 4y ago
    So the richest get even richer, at the expense of everyone else. How is that not a pyramid scheme?
    • zeroclip 4y ago
      “Richest get richer” could describe any form of capital investment in a risk-on asset that appreciates over time: buying gold, stocks, real estate, art, VC. If you have capital to place at risk in an investment that gives you a return*, you are “rich and getting richer.” Unlike stocks and other investments, you don’t need a large amount of capital to receive a PoS reward, and there are less significant economy of scale. All validators receive an equal % return no matter how much Eth they deposit. Those without 32ETH capital can use pools and decentralized staking platforms to receive the same % return minus a small fee to the service who has the capital at risk and is doing the work to validate. Opposite to a pyramid scheme: if more people join Eth deposit pool, everybody including early investors earns collectively less % reward on their stake, and the equation for this is explicit and known! And the staking deposit of each new entrant does not funnel back up to early entrants. * Note: a lot of these investors are down since last year, not just Eth but stocks and other investments have crashed.