say the #1 holder has 19% of all eth, and #2 holder has 18%.
then after rewards, #1 holder has 19.02%, while #2 holder has 18.01%.
in a long enough time scale, wouldnt #1 holder's stake only grow bigger and bigger until eventually over 50%?
what prevents this?
also, doesnt this encourage zero market activity, so people just hoard their coins without ever actually contributing to the marketplace?
am i a fucking idiot for asking this here?
Everyone sells eventually. Buyer one will start cashing out when he thinks the price won't go higher and the market becomes more equally distributed over time.
>>2982435
You get rewards proportional to your stake. It only increases your percentage compared to those who don't stake at all.
>>2982568
Hypothetical scenario: 100% interest, half of all ETH is staked. 100 mil ETH to start. Consider two stakers, 1 and 2 million ETH.
Before: 1% and 2% of the ETH supply
After: now 2 and 4 mil ETH, total supply is 150 million (half staked at 100% interest) Percentages: 1.333% and 2.666%
One is still double the other. Neither has gained an advantage. The only change is they both gain compared to non-stakers.
Compounding changes nothing when they both gain proportionally the same.
>>2982637
But they didn't gain proportionately the same. In you scenario, someone starting at 50mil ETH would end up with 100mil ETH, moving from a 50% stake to a 67% stake. OOPS
>>2982755
what is interest?
>>2982435
It would take a long time.
Like 700 years.
By then there will be a better solution.
>>2982755
In my scenario, total staked ETH is 50 mil, so that implies only one staker. That aside, 50% to 67% is the same growth as 1% to 1.3%; it's a third.
Perhaps you'll get it if you consider percentage of staked ETH.
50 mil is 100% of staked ETH before and 100 mill is 100% of staked ETH after.
1 mill is 2% of staked ETH before and 2 mil is 2% of staked ETH after. 1/50 = 2/100
2 mil is 4% of staked ETH before and 4 mil is 4% of staked ETH after. 2/50 = 4/100
The only change in the distribution is that staked ETH grows and unstaked ETH doesn't, which is trivial from the premise.