Why not incentivize create decentralization by crediting a higher portion of fees to addresses staking lower balances?
Using arbitrary #s if 10 zcash are staked earn 5% on balance if 100 zcash are staked earn 4% etc. etc.
Over time would think this could naturally incentivize decentralization.
The emission is fixed so the return % is always realtive to N stakers and nothing stops you from splitting your big pile across multiple VMs into small piles
As a large holder I will have to disagree. Hello greed.
How does changing reward percentages create decentralization?
That just invites a sybil attack. Large holders will just split their stakes into more shards.
A somewhat radical idea:
One of the issues with PoS is that stakers get rewarded twice: they get the block rewards, plus they get all the upside from increases in the token price. There’s a feedback loop.
To break that feedback loop, one (weird) possibility would be to have the staking token be a wrapped “stablecoin”. In some sense, this is analogous to how PoW mining works: miners pay in their local fiatcoin for ASICs and energy, and get ZEC rewards; their mining hardware depreciates (and by analogy, if we used a fiat-pegged currency for the staking token it would suffer from inflation). They can choose to sell the ZEC they mine to reinvest in their mining op, or they can HODL for hard-money gains, but they don’t get to double-dip.
It’s an open question though whether PoS would actually be viable under this sort of scheme; I haven’t done any analysis to see how it would affect PoS’s security assumptions. And, of course, the idea that one might stake not-ZEC to secure ZEC is just a weird idea to begin with. But it, or something adjacent that breaks the feedback loop in the same manner, just might work.
Why do you assume that the token price will increase?
Because if that assumption doesn’t hold, it will mean that there’s not enough usage to make any of this worthwhile anyway. I want ZEC to exist as private internet money - for it to be that, it has to be used everywhere. It would not be possible for that to happen without having positive effects on the price of ZEC.
OK, but it doesn’t mean that the path will always be upwards.
When people stake their coins, they take the risk of token price variation. If instead they get stablecoins, I don’t see how they will be issued in a falling market.
Token price goes lower → need to mint more tokens to keep reward constant → supply increases → token loses more value.
maybe if there is some collateral reserve that absorbs the variations
If the token price goes lower, doesn’t that mean that stakers who have a bunch of value staked will want to unlock that value (and potentially buy cheap ZEC) instead? Why would they keep large amounts staked for lower-value rewards?
If the token price is rising, competition to stake will be rising as well. But if the staking token were something like zDAI, that one could bring on-chain from external sources, that results in more total value being brought on-chain. This could even cause a ratchet effect: lower prices get buffered by on-chain swaps, while higher prices cause more total value to move onto the Zcash network.
Ah, the stake is also in stable coin. I think it should be OK since it looks like zcash would be a parachain (polkadot style) of the stablecoin POS.
Isn’t this one big reason why POS is better than POW? By resting the security of the network in tokens that are quasi-equity of the network, it will be hard for any one party to attack the network as they would need to acquire the native tokens (which will increase in value). The feedback loop is true for both stakers and also for network attackers.
To attack the network, attackers will have to acquire tokens (presumably from the market) which will increase in value the more the buy. Meanwhile, if the attack is successful their weapon (tokens of the network under attack) will then become worthless.
Having USD as a stake, would mean that people with access to large sum of USD (anyone really) will be able to attack the network without losing any sleep, as their weapons does not decrease in value as the network is attacked.
There is this website I have been experimenting with lately called ZKSwap.
Its a interesting use case of something to similar to what you mentioned.
All of the following 4 categories, are referred to as mining.
Proof of Stake
You will get ZKS rewards by staking ZKS. Please note that you will not be able to get the staked ZKS back until after the PoS event ends.
Proof of Gas
The ZKSwap team will randomly withdraw ETH from the PoG pool every day based on the gas fee consumed by ZKSwap. Your deposited ETH will be consumed proportionally to your share of the PoG pool each day. You will be rewarded with ZKS at 125% value of your consumed ETH each day.
Proof of Liquidity
Zkswap’s liquidity providers can participate in the liquidity mining activities on this page, splitting the ZKS prize pool. The mining rewards will be distributed to your L2 wallet account every day. Each activity needs to activate the address separately to start mining.
Proof of TransFee
If you participate in the L2 swap of the following transaction pairs, you can divide up the mining reward according to the swap amount, and the reward will be automatically distributed to your L2 wallet account every day.
Those are really good points. Those are the security assumptions of PoS that I was talking about. I have been considering that physical hardware & energy are really just a proxy for $$$ spent, but there are also the “natural” limiting factors of the ASIC supply chain, physical access to industrial-level power supplies, and in particular the sunk cost of mining hardware that represent a substantial “burned overhead” for miners. Of course, this is part of the problem with PoW - that those with access to the economies of scale that minimize those costs dominate mining.
I think the original suggestion in thread is really intended to encourage people to explore creative solutions to this problem: is it possible to come up with a scheme that (a) disrupts these economies of scale, and (b) doesn’t result in progressive centralization of power?
The idea that I posted could very well not work. I’d like to encourage everyone to post other ideas that might not work! If we explore enough bad ideas, we might find the seeds of a good one.
My last idea was kind of scattered across the bitcoin vs gold thread and, not unlike all my other previous ideas, consists of a far-out hybrid model (the hows aren’t ironed out and may not work at all idk). The reason for that stems back to the asic mega-discussion and my own reasoning that an asic-gpu ‘stalemate’ of sorts is the best option. I helped chilebob with that even-odd scheme that time which was super fun though how to pit them evenly was the problem, they’re two different kinds of machines 🙍 and aren’t really equitable in comparison even when forced into equality. Asics completely blow gpus away with hashing and gpus can potentially do infinity -2 more things than an asic. The even-odd deal was forcing a ferrari to permanently tie a minivan and was clunky (but fun!).
So the idea is halve the reward into two seperate chains; the current main asic driven chain and a new gpu oriented chain. My idea for it is a PoR/Pos system where the rewards are not transactable on the second gpu chain except to transfer to main chain and never return. This makes potentially long blocktimes there irrelevant, prevents combining stakes and points the power consumption problem at more meaningful work with all manners of gpus. It otherwise could only really help secure the mainchain more by boosting competition over the remaining reward there which I think is how it goes anyways. I know its weird, 2 reward systems but still only 1 way to spend it. I’ll look through that other stuff I posted but I think thats the gist of it.
If Zcash decentralized and held positions on multiple chains, incentivize the holders for, likewise, holding on multiple chains to secure the whole system, like a Buckyball.
…and if you guys are sick of my metaphors, I won’t take it personally.
I love the miners: worst case scenarios, we might need PoS, and the miners will be happy to be holding if they are for some reason, in some regions, for some time, unable to work.
If I invest a ton of money into ZEC I want to be fairly compensated if I am staking a massive amount to keep the network running.
I hate this idea.