This interview was done as part of the 2021 Staking Ecosystem Report by Staking Rewards.
The report was sponsored by StaFi Protocol.
Keplr is the interchain wallet built by Chainapsis.
Q: Do you think proof-of-stake based governance systems can be applied outside of protocol governance and grants? And how?
A: Most proof-of-stake based governance systems enforce a highly rigid governance system to ensure maximum security and resilience. I believe the standards for grants and out-of-protocol votes should be relaxed–opting for lesser quorum, shorter voting period, and perhaps delegating the responsibilities to a DAO-like process. Not all proposals merit a full on-chain vote. Having a responsive and quick process can be immensely beneficial for grants processes.
Q: How do we ensure and incentivize further decentralization within the staking ecosystem?
A: This may be an unpopular opinion, but I don’t believe that an exceptional validator with highly valuable contributions having 10% of network stake is bad. There’s nothing worse than ‘decentralization for decentralization’s sake’. Proof-of-stake is largely proof-of-contribution. Work hard to create valuable products and services for the chain, get delegations in return.
That being said, it’s true that sometimes builders are not fully recognized for their contributions–and this is the part where I think foundations/communities can assist in highlighting their value.
Q: What are the biggest challenges for Proof of Stake and Staking, that we still have to overcome or may still face?
A: Liquid staking.
Q: What is the biggest business risk for your company? Are you worried about any developments in the industry?
A: Protocols continue to get more and more complex, while the number of devs catching up to the latest developments gets smaller and smaller.
Q: Which upcoming protocol projects are you most excited about and why? Is there a protocol that no-one is paying attention to but should?
A: I’m a bit biased, but Osmosis.
Q: Which network or protocol in the market do you think has the most future-proof token economics? And why?
A: None. Even Bitcoin. Token economics is more about being responsive than predicting the future.
Q: Which protocol has the best approach towards governance? And why?
A: Secret Network. They have found a good balance between on-chain votes and off-chain committees, and have a passionate group of communities that run it.
Q: Which network or protocol in the market has so far proven to have the best “product-market-fit”? And why?
A: Solana & Cosmos ecosystem. Both contrarian takes on blockchains that have found huge success.
Q: What could be done to increase overall awareness and participation in protocol governance?
A: Increasing the link between discussion forums, group chats to voting power.
Q: Do you see staking yields competing with DeFi yields? What are the implications of this on network security? How to balance these?
A: Short term, no. Long term, yes. The answer is liquid staking.
Q: Are Staking Lock-Up times any good for protocols? Or unnecessarily overthinking protocol security?
A: This one’s a difficult one to answer. I don’t think it’s realistic to pull off an attack where someone accrues 66% of stake regardless of lock-up periods. But we always have to prepare for edge cases.
Q: We have seen a lot of talk about PoW’s energy consumption in recent months. How important is energy efficiency for PoS’ case when it comes to long-term adoption?
A: It keeps the ‘blockchain is bad because it kills our planet’ meme away. So very relevant.
Q: What is your vision of the staking economy/industry in 5 years?
A: Increased specialization. Right now the staking economy is a group of generalists, but I expect each of them to find different areas that they specialize in.
Q: Ethereum 2.0 – What are you most excited about? What are you concerned about?
A: Cheap gas. Worried that realistically ETH staking is a lot more centralized than the idealists believe.
Q: With an increasing market-lead for proof-of-stake based networks. Is there a future for proof-of-work besides Bitcoin?
A: Yes. Mining is a beautiful token distribution mechanism that hasn’t been replicated on proof-of-stake yet.