Ethereum saw an additional $400 million staked this past week according to staking rewards. At the time of writing head line data points for staking ETH looks like this:
Total ETH staked – 9,956,701 ETH
Total validators – 296,693
Current APR – 4.9%
Just for fun and to respect the persistence of numbers I predict the number of validators will double by the end of next year. Interest rate rises and geo political car crashes mean an Ethereum price below $2k is possible especially if the merge is delayed and even if not. Predisposed to look on the good side, I see this as an opportunity for more people to participate and stake and own ETH, before the inexorable rise past $10k per ETH post merge.
I hope you are enjoying my reckless use of numbers that will be rubbed in my face like huge poop pies in 12 months when they turn out to be wrong. I also feel I can promise you that in the long run as you have experienced in the short run, as customers you are most likely going to make a boatload of money staking ETH.
Ethereum staking benefits
If you worry as I do about how the real economy can benefit from Ethereum and staking. The challenge is being aware and acknowledging that I was wrong about the idea of core technologies platforms being
decentralised, like Facebook and Gmail through economic incentives being given to new users of new Web3.0 equivalent tools. The UI problem and the compelling nature of the existing tools and the depth to which these tools are embedded in our lives means it makes switching very hard.
However borrowing money and earning interest from your money are real world use cases that have proved far more doable and useful. In both cases Ethereum provides options that conventional finance does not. The challenge these use cases still have is that they are the preserve of crypto bros and hedge funds, not Mums in Bolton.
Adrian Pabst in Prospect Magazine argues how broken the British economic model is, stuck in a vicious circle of low investment, low productivity, low skill, low wage and low growth. UK productivity growth has flatlined since the 2008-09 financial crisis. Since then, according to figures published by the Office of National Statistics last month, output per hour growth was the second slowest across G7 advanced economies. NIESR forecasts that over the period 2023-27 the economy will grow by just 1.25 per cent per annum. Ouch.
He argues the case for regional and national co-operation with a sprinkle of decentralisation mixed in. However, the argument comes down as so often does, to money. How do you pay for this long term
investment when you have a political class whose entire credibility is based on being able to borrow money cheaply in global markets to finance day to day running of the country?
Those meany markets don’t care about Mums in Bolton and delivering productivity growth there,
they just want market orthodoxy in the form of “make your bond payments, lower your government spending, and lower regulation to allow capital’s animal spirits to deliver trickle down wealth. If you
follow the recipe markets will reward you with allowing you to stay in power by allowing you to keep your government credit card.
Quantitative easing has created a wild moral hazard and contradiction in this faustian pact, dressed up as an unavoidable economic reality. This reality does not allow for 70 or 120 billion to be invested in the north of the UK because however politically compelling it is, the high wizards of the treasury will explain how its a nice idea but it won’t work.
If data is the new oil, why not issue UK national ETH staking bonds whose principal is hedged that can provide new money that is inflation proof that can provide that long term investment? Crazy? Well if we
are actually going to help Mums in Bolton, economic orthodoxy is going to need to embrace Ethereum and the new functionality it brings.
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