📖
RIG Open Problems (ROPs)
/
🦆
ROP-11: The stake supply curve and future staking economy
🦆

ROP-11: The stake supply curve and future staking economy

Difficulty
Intermediate
Tags
Data
Modelling
Status
Matched
Created time
Apr 3, 2024
ROP
Involved
Phase
Pitch
Research into the makeup and evolution of Ethereum's historical and current staking economy, using this to draw inferences about the staking supply curve and as the basis for projecting the impact of proposed issuance changes on Ethereum's validator set.
Abstract
Since the launch of the beacon chain, the proportion of all Ether staked (the staking ratio) has grown almost monotonically. Should this process continue to the point at which the majority of Ether is staked, it is plausible that a staking derivative could effectively displace Ether for extra-protocol uses, effectively introducing 3rd-party intermediation into the heart of Ethereum's economy, excising the asset with the strongest claims to trustlessness (Ether) and arguably weakening Ethereum's core principles of permissionlessness and censorship resistance. While it is as yet unclear what staking ratio limit would mitigate this threat, the staking ratio has already surpassed the 25% level tentatively proposed by some to be a suitable balance between economic security and the threat of protocol capture. In response, a change to the Ether issuance curve has been proposed for the Electra/Prague fork, aiming to limit stake growth while further research is conducted into a future stake ratio 'targeting' mechanism.
The intention behind this project is to deepen understanding of the likely consequences of a future staking ratio much higher than at present, and also to explore the potential impact of suggested changes to Ethereum's issuance curve on the staking economy. This will be accomplished by analysis of the historical evolution Ethereum validator set to allow inferences to be drawn about the supply curve for staked Ether for different categories of operator. Based on these inferences, projections will be made about the likely impact on the make-up of the validator set of reduced Ether issuance or a stake ratio targeting scheme.
Received deliverables
TBA
Resources
📖
RIG Open Problems (ROPs)
/
🦆
ROP-11: The stake supply curve and future staking economy
🦆

ROP-11: The stake supply curve and future staking economy

Difficulty
Intermediate
Tags
Data
Modelling
Status
Matched
Created time
Apr 3, 2024
ROP
Involved
Phase
Pitch
Research into the makeup and evolution of Ethereum's historical and current staking economy, using this to draw inferences about the staking supply curve and as the basis for projecting the impact of proposed issuance changes on Ethereum's validator set.
Abstract
Since the launch of the beacon chain, the proportion of all Ether staked (the staking ratio) has grown almost monotonically. Should this process continue to the point at which the majority of Ether is staked, it is plausible that a staking derivative could effectively displace Ether for extra-protocol uses, effectively introducing 3rd-party intermediation into the heart of Ethereum's economy, excising the asset with the strongest claims to trustlessness (Ether) and arguably weakening Ethereum's core principles of permissionlessness and censorship resistance. While it is as yet unclear what staking ratio limit would mitigate this threat, the staking ratio has already surpassed the 25% level tentatively proposed by some to be a suitable balance between economic security and the threat of protocol capture. In response, a change to the Ether issuance curve has been proposed for the Electra/Prague fork, aiming to limit stake growth while further research is conducted into a future stake ratio 'targeting' mechanism.
The intention behind this project is to deepen understanding of the likely consequences of a future staking ratio much higher than at present, and also to explore the potential impact of suggested changes to Ethereum's issuance curve on the staking economy. This will be accomplished by analysis of the historical evolution Ethereum validator set to allow inferences to be drawn about the supply curve for staked Ether for different categories of operator. Based on these inferences, projections will be made about the likely impact on the make-up of the validator set of reduced Ether issuance or a stake ratio targeting scheme.
Received deliverables
TBA
Resources