Here on the Hive blockchain we already know a good amount about staking crypto and earning more crypto from it. However here it's called powering up which locks those tokens for a period of time to earn rewards.
Ethereum just a year ago went from a proof of work system to a proof of stake system and over that time we have seen a lot change and a lot of lessons learned. In this article I want to go over some of those and also lessons learned and what the future might be looking like for proof of stake.
This year over any other year it feels and seems like the SEC and governments are caring more and more about staking and trying to enforce rules around it. Sadly those enforcements have come from no clear information from the SEC and instead once again just lawsuit after lawsuit of which the SEC keeps losing. However even though the SEC loses these cases it comes at an expense for companies, investors and tax payers. These enforcements also do nothing to protect investors which is what the SEC is suppose to be doing and has stirred up a great deal of drama not only from the general public but also from congress and the house in the USA.
One of the biggest issues with this however is it's driving staking away from the USA while still being very present in other countries making sure that those in the USA are falling behind and not having a equal playing field compared to others which is exactly what the SEC is suppose to allow.
DeFi was one of the booming factors in the last bull run. However with constant rug pulls, hacks and countless other issues that continue to happen in the space the DeFi sector has cooled off in a big way.
With Ethereums Shapella upgrade that happened it allowed for stakers of ETH to now be able to withdraw that ETH from staking and have a good idea as to when that unstake would happen. This has caused a lot more staking to take place of the token and with that we have also seen renewed interest into it from the ETF standpoint. Most likely these ETFs will also become stakers and DeFi investors as they will need to also generate returns on the tokens instead of simply holding on to them. Kind of like a bank a portion would be liquid while the other portion would be used as an "investment" into staking.
This in general will boost demand for DeFi and other yield bearing liquidity tokens which we have been seeing come forward lately. I wrote an article on this which you can read here DeFi Liqudity Pools
Lessons can be learned but only when action is first taken. There will be failures and mistakes but they should always be looked at as learning experiences to never repeat that mistake and figure out what went wrong but also what went right.
A big yelling point for a while from both government and users was that ETH was simply using too much power and polluting the world. While this really wasn't the case and in fact large green power systems such as wind, solar etc where created to power these large facilities. When ETH changed to Proof of stake power consumption is now just 0.1% what it was during its all time highs. These power grid systems now power ever day life and communities with green power and I think that shows us a lot of positives that came out of it.
Another large yelling point was that moving to POS would consolidate things and create an ever more centralized blockchain. While yes this does seem to be the case it could also be argued that POW (Proof Of Work) was the same thing with billion dollar companies buying up all of the mining equipment and driving it unprofitable for anyone else.
Liquid staking is pretty new and again I wrote about this in more detail on my article here DeFi Liquidity Tokens These have grown by a large amount over the last few months. One of the largest DeFi platforms doing this is called LIDO.
Instead of staking your ETH directly to the Ethereum network you instead are given a liquidity token that represents your ETH you just gave/staked to the Lido or the DeFi platform. LST's as they are called allow for quick trading of Ethereum while still being able to invest them into DeFi pools, earn staking rewards and more! This however also increases centralization of the network once again.
