Endgame Staking Economics: A Case for Targeting

Note that these proposals are not actually hoping to “get all of the numbers right”, they are quite agnostic to the ratio between “true operator stake” and “delegated stake” or “re-staked stake”, they simply reason out about the aggregate size of the staking set. Scaling the staking set size by 2x may mean that you get 2x the dollar amount of “true operator stake”, but also may not (e.g., larger staking set => more LST network effects => more incentives to delegate to LSPs). Either ways, there are indeed risks of misalignments between principals and agents, but these risks have more to do with staking UX (by which I mean broadly the set of mechanisms that are in place in- and out-of-protocol between stakers and the protocol) than with the current discussion. To be clear, these mechanisms are important and they help us improve the quality of our staking set, which is a necessary condition to me (see recent post), but not sufficient to achieve sustainable staking conditions.

This is besides the point but selfish mining attacks are also profitable in a block-rewards-driven regime, though yes when you are in a transaction-fee-driven regime you need less hashpower to launch them with +EV. More generally, the proposals made for Electra or this curve with stronger targeting are not more opinionated to me than the current reward curve that we have, they just express different opinions, which appear to me to be broadly more in line with the goals of Ethereum. So it’s not really a problem of adding complexity to the system vs status quo, but deciding what best suits the needs of our network.