1/ A PoS industry is rapidly emerging that will someday rival PoW in profits and wealth creation.
2/ That's billions in profit and tens of billions in wealth creation for PoS providers (at current PoW levels), with at least an order of magnitude of headroom.
3/ This is despite PoW & PoS having a shared destiny as commodity industries with thin margins.
PoW will converge on the cost of electricity and PoS on the cost of crypto-capital (?).
PoW will converge on the cost of electricity and PoS on the cost of crypto-capital (?).
4/ Custodians are likely the dark-horse of the PoS industry, and could crush many of the PoS teams getting off the ground now if the upstarts don't scale fast enough.
5/ Custodians will become better than free, paying customers to store their crypto with them to earn a yield from the custodied cryptoassets.
6/ We’ve seen a similar rendition of this in the securities industry, where “securities lending” has become common practice, and enables zero fee ETFs. barrons.com/articles/etfs-…
7/ But consolidation will come later. Now is the time for an explosion of third-party staking providers, which is exactly what we're seeing.
8/ As @jbrukh and the @coinfund_io team have pointed out, staking is predominantly software based, which has lower startup costs than the hardware predominant PoW industry.
9/ Lower costs to entry will mean more teams, experimentation and potentially even fiercer competition than we saw as crypto's PoW industry matured.
10/ Maturation of the PoS industry could lead to greater consolidation than we've seen with PoW, as these cryptoassets will have gravity in their earning potential, as has been written about at length by many members of the community.
11/ How will investors fit in? Other than funding the creation of the PoS industry, serious crypto fund will also be stakers themselves, as @coinfund_io and @notationcapital have been pointing out.
12/ Governance is one area where PoS-services will remain bespoke, or at least third-party service providers will have to offer dexterity. Large holders may outsource operations (leading to custody consolidation 😬), but they will want to retain governance discretion.
13/ This all presumes PoS & its many derivatives will survive the wild, a bitter debate in crypto for as long as I can remember.
While I’m not the expert that can prove PoS's viability, being a technology & economic problem, I give it good odds that humans perfect it w/ time.
While I’m not the expert that can prove PoS's viability, being a technology & economic problem, I give it good odds that humans perfect it w/ time.
