3 ms·

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 netwo

• 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.