As long as there’s a premium on staking returns over the risk-free rate, capital will flow into staking, i.e., people will start taking on debt to participate in staking, until the premium is no longer there.
All investments have a rate of return, which is *not* to be confused with an interest rate. One can invest in productive assets (stocks) or non-productive assets (gold, currencies). Fiat is an asset with negative rate of return over the long term, due to its inflationary nature.
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Bitcoin (and fixed supply currencies) has non-zero rate of return because 1/ people buy into the vision of uncensorable sound money 2/ the larger economic pie (GDP) keeps rising thanks to productive assets
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I'm not talking about debt for no reason. I'm talking about debt because it is an inevitable evolution of the market: capital will naturally flow to where the best returns are. You have to account for this when analyzing staking, esp. as its main cost component is financial.
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I'm not confusing these. Interest rate parity in forward markets implies an expected return for holding a currency that is equal in each currency, discounting future changes in value equal to the real interest rate differential through a change in the present value.
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Also I'm not saying you're talking about debt for no reason-- definitely a big part in how the economics of staking play out. However, you can be right about debt and still be wrong about the value impact of staking (can not only focus on debt).
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To be clear-- I'm not saying you are wrong. I'm saying your arguments (for why you are right) don't demonstrate sufficient evidence for your conclusion.
End of conversation
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Money is not equity, period.
When you park capital in a non-productive asset, it is OUT of the system completely. Decommissioned.
The non-productive asset value can only rise if it piggybacks on the success of productive assets.